Be Aware – The Laws of Sod
Be Aware – The Laws of Sod
By Chris De Luca
These laws apply, more or less, to pretty much every type of investor and where they may be looking to invest. Whether you’re looking to invest in shares, through ISAs or pensions for example, or into houses or other property ventures to name but two types of asset class/’opportunity’, these laws can also apply to investing in or running a business.
LAW 1 – “Understand why you are making this investment”
- Does it match your objectives and timeframes? See my earlier articles.
- What are you risking in terms of money, time, energy and sanity (!)?
- If you are not wholly happy with the above implications, then think again.
LAW 2 – “Have the patience to let the dust settle”
- Shun impulse and embrace objectivity to avoid rushing into decisions now which could have detrimental long-term consequences.
- Being able to “see the wood from the trees” an old expression so take time to make sure you plot the right path.
- It’s easier said than done sometimes, I know, in terms of how you react to sudden, unexpected events but always try to keep the long-term perspective in mind when making, even short term, decisions.
LAW 3 – “No-one knows it all”
- Not even you or me!
- There is no such thing as a stupid question, it’s only stupid not to ask it!
LAW 4 – “If a deal looks too good to be true then it usually is”
- If the normal rate of return for a particular type of investment (or asset) is, say, 4% per annum and you are being offered 8% then warning bells should ring.
- Be concerned if you are told that your money is as, if not more, safe as well.
- Never “buy now while stocks last”; you might miss five golden opportunities to make money but that one bad investment could wipe out all those gains.
LAW 5 – “Your own due diligence is never a waste of time”
- The, often very glossy, literature accompanying an offer should include assurances regarding security, who they are regulated by and who they are endorsed by.
- All the above should be checked and, if you are being pressed to sign without being given the time to do this, then walk away, no ifs or buts.
- If you are likely to feel pressurised, always have someone with you can who you can trust.
LAW 6 – “Seek someone else’s opinion”
- Talk to someone* you trust and who is not involved with the proposed investment and who will give an objective, unbiased view.
- And there is no harm to get a second opinion after that!
LAW 7 – “Understand what the risk involved in each asset”
- When financial people normally talk of risk they are referring to stock markets crashing but that is not the only type of risk that investors can face.
- Liquidity, creditworthiness, inflation, political interference, taxation – even currency – can also have an impact.
LAW 8 – “Check official-looking emails before responding”
- This is a very common form of attack by fraudsters, the contact is either very aggressive (I have been told that the police are on their way to arrest me on several occasions unless I give them some money!) or they express the most sincere concern with regards to our savings and general welfare.
- The emails and their addresses can look very genuine but, if you are being asked for passwords or other confidential information or to move funds out of an existing account, then stop and perform checks.
- If you already have a contact number for your bank then use it to see if the email is genuine but do not use one provided in the email.
- If you do not have a number then use Google to see if you can find one or if there are warnings regarding the approach that has been made.
- If you only have a contact email then use it to check; for additional security perhaps use a different device to do so.
Before you commit to any type of investment, always seek advice from a trusted financial adviser. Send me a message or visit our website for more details on how my firm can help: www.juniperfinancialmanagementlimited.co.uk