Try to Stay Far Away from Malinvestment

As wise, smart investors we want to get great returns but sometimes investments promise great returns or show great returns than spectacularly collapse. Leaving you without that wealth and feeling burned from the market. So how as forward thinking investors do we avoid thew possibility of malinvestments. It is not simple because it is easy to fall in the trap and sometimes malinvestments are displaying results and activity of perfectly good investments. I will try to tell you a few ways to avoid malinvestments.

1. If someone is offering you a guaranteed rate of return is lying to you. There is no way that anyone can know the future and get the rate of return you can expect. That person selling you the investment is hiding something and probably something is very wrong. It should be a warning flag and alarm for any and all investors. Okay, that one is pretty common sense and should already be followed.
2. A broker offering you on the ground floor of an investment is probably a bad investment. The only way it got to you if you are a retail investor is if it stinks and no ones else was willing t touch it. Let some other sucker bite and lose money. There are better more stable investments around. Just remember for you to get in on the ground floor of an IPO it has to travel through all the banks, hedge funds, big time investors, and probably even more people. You are the last and the broker really needs to unload this investment onto you. If you are a wealthy trader already you might be able to ignore this message. 
3. Watch out for possible bubble assets. This are ones that very one has to buy, it's the next great thing, and you couldn't possibly lose money. You can and there is a big possibility you will lose money. This firms are ones that do not have much income, little business experience, and people are just focusing on the possibilities not on the actual results. The stock is already probably overvalued when you get in because it has no income and little prospects to make money. At least the money that would justify the value. Remember the dot com boom and subsequent bust. It happens all the time and you don't want to be on the wrong side of the trade. You as a retail investor must keep in mind that it will be arduous to beat the bubble before it pops. The information you have will less and later than the high power traders. 

I know this sounds unnerving and might think that stuffing the mattress is a better alternative to investing money. We must recall that investing is about risk and reward. Malinvestments have high risk and little reward which is why they are to be avoided. There are many good investments out there we maintain our diligence in looking for long term projects for money.  The best way to stay ahead and avoiding the terrible possibility of losing money is having a diversified portfolio that has some riskier assets and some stable assets. This way you hedge and always remain on top. Keep up the good investing and the good strategy and you will retire a wealthier person than a less attentive investor.