Some investors will use their life savings in a last chance effort and if they get this decision wrong or become victims of a scam, then the repercussions for them and their families can be quite dire. This article aims to highlight some of the warning signs that investors can look to assess whether they are making the right decision.

How to Spot the Bad Apple ?

1. Good investment adviser will be able to provide real proofs and track records of generating profits ! Thus, you as the investor needs to be vigilant in terms of checking the paperwork that accompanies any proposal. If a scheme is based on pure word of mouth and no one is willing to provide documentary evidence of the scheme then you are probably onto a loser. You need to get out fast before you get fleeced by them.



2. Investment opportunities that have a history of failure are a no go area of the wise investor. This is particularly true if the investment is doing the same things that it was doing before. Logically thinking about it, there is no reason to follow a failed scheme.
3. If the scheme looks unrealistic then it probably is. The secret is to ensure that you are not blinded by greed for success so that you fail to spot the obvious signs of a dud scheme.
4. Schemes that tend to underplay the risks involved in making a profit are on balance not well thought out. You should always operate on the basic principle that in order to make a profit you have to have a risk. If the investment prospect does not give any indication of the risks involved, then you need to stay away.
5. Where the investment opportunity is unpopular with other investors, you will need to do some research and find out the reasons for its unpopularity. These reasons might indicate to you in the simplest terms why it is not a good idea to continue with the scheme. It might be that the scheme is unpopular because it has not been well marketed but in any case you will need to ascertain its true status.
6. Do not jump into very large investment schemes without doing real research about the people involved. The higher the amounts of money involved, the bigger the stakes for all investors. Unless you are prepared to give away free money, do not invest if they want to get you to invest bulk amounts of money without any explanation.
7. Likewise avoid those schemes that tend to offer very little investment opportunities in terms of the value of amounts requested. If the money requested is too low then it might be good indicator that you are giving away money rather than investing it.

In conclusion I would argue that this is not a bible for investors but rather a snapshot of some of the obvious signs that an investment opportunity is not as good as it seems.

Your challenge is know who is a charlatan and who is a genuine investment opportunity. The solution might lie within your ability to select a trusted adviser to give you a step up on what is the best way forward.

How to Choose an Investment Adviser ?
The first thing to consider is the reputation, experience and reliability of your investment adviser. There are trade associations and banks which may have a list of reputable advisers who you may use but remember that nothing can replace the recommendation of someone who has used that adviser before. If you can possibly arrange it, take references and follow them up. There are also minimum qualifications that you will need to check to ensure that you are taking on someone who is able to handle your investment affairs with competence.

An investment adviser is a person in great authority and will advise you on very personal matters. Their conduct can determine whether you remain a poor person or improve your life. That is why it is imperative that you hire someone who is full of integrity and purpose. Of course you cannot tell whether someone is honest or not by looking at them. It is best to do a criminal check to see whether that person comes up as a potential fraudster. You may take them up even with a criminal record but at least you will be weary having studied their background.

Ask them for samples of their work and be sure to follow them up independently to verify some of their claims. As human beings we tend to exaggerate our own importance and achievements in order to get a job but it is the responsibility of the employer to check that these claims are not pure fiction. If you do not do thorough checks, you might end up losing your money.

What Can An Adviser Bring To Your Investment Plan ?
The investment adviser will have a lot of skills and knowledge that is not easily available to you. They will also have up to date knowledge of the type of investments that work and those that do not work. If you rely entirely on your own limited experiences, you might make a very bad investment decision. If the investment fails, you will have someone who can advise you once again in terms of rescuing your situation.

However like any employee, the investment advisers need plenty of supervision in order to function effectively. You cannot just leave them to their own devices and hope for the best. Selecting an investment adviser is like an investment itself so you should strive to choose wisely and carefully.