Fear and uncertainty caused by the coronavirus pandemic have spread through the world. On top of those problems, the issue of police brutality of black men has been brought to the attention of the world once again. The tragic killing of George Floyd by a Minneapolis police officer and police killings of other black people have flooded the news. The demonstrations, peaceful protests, and sometimes riots and violence have captured the interest of the United States and other parts of the world.
To invest is to allocate money in the expectation of some benefit in the future.
In finance, the benefit from an investment is called a return. The return may consist of a gain (or loss) realized from the sale of a property or an investment, unrealized capital appreciation (or depreciation), or investment income such as dividends, interest, rental income etc., or a combination of capital gain and income. The return may also include currency gains or losses due to changes in the foreign currency exchange rates.
Investors generally expect higher returns from riskier investments. When a low risk investment is made, the return is also generally low. Similarly, high risk comes with high returns.
Investors, particularly novices, are often advised to adopt a particular investment strategy and diversify their portfolio. Diversification has the statistical effect of reducing overall risk.
The world is in turmoil, and investing may not be on people’s minds. But with the pandemic, many people have suffered financially so money is an issue. They may be looking for a way to earn some much needed money.
There are still a lot of gurus out there who want you to trust them by signing up for their stock investing newsletters. They promise big returns and make big claims. Their testimonials sound almost too good to be true. Perhaps they are.
The so-called investment gurus are touting their programs even as the unprecedented times caused by the coronavirus have affected everyone. They are saying that there are exciting investment opportunities in oil, banking, crypto, medical companies, and more even during these troubling times. They have common names like Jon, Tom, Ken, Alex, Mark, and Jeff plus some more uncommon names such as Jordan, Derek, and Kyle. Who can you trust? It is hard to know.
Sometimes they promise 100% returns on your investment or they may be bold enough to promise $2,000% in a year. They say that you will most likely get your return on investment with your first trade. If they promise big returns, it is best to make sure they have a money back guarantee if they do not produce as claimed.
Terminology and risk
An investor may bear a risk of loss of some or all of their capital invested. Investment differs from arbitrage, in which profit is generated without investing capital or bearing risk.
Savings bear the (normally remote) risk that the financial provider may default.
Foreign currency savings also bear foreign exchange risk: if the currency of a savings account differs from the account holder’s home currency, then there is the risk that the exchange rate between the two currencies will move unfavorably, so that the value of the savings account decreases, measured in the account holder’s home currency.
In contrast with savings, investments tend to carry more risk, in the form of both a wider variety of risk factors, and a greater level of uncertainty.Diversification has the statistical effect of reducing overall risk.
If those promises would come true, it would be a great opportunity and blessing. However, too often they are false promises which do not come to fruition. If you can find a program which pays as claimed, you can consider yourself one of the lucky ones.
It’s pretty pathetic when not losing is considered winning, but that is the case in so many investments. We may be happy to just not lose our shirts although the gurus told us we would win 100% or more with their recommendations. When going with the recommendations made by the gurus, it is important to cut your losses before you do lose your shirt so to speak. Winning is the goal, of course.
Fake claims and dead ends can bring a lot of stress. Minor setbacks can be overcome without major losses. It is tempting to listen to investment gurus to follow in their footsteps to get winning trades. However, you can’t trust many or most of them. It is best to research and learn so that you can trust in yourself to make the best decisions.
Japanese Americans lost everything during World War II when they incarcerated in camps. A free eBook is available by checking out the website and reading the introduction. Many in the general public know very little about this part of American history. The book covers civil rights issues and is available on Amazon. http://www.thejapaneseamericanstory.com
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