When should you avoid investing in an asset?

Investing is a great tool for building wealth, and one that we should all be utilising to the best of our ability, regardless of our financial position or stage of life. There are many ways to do this, from stocks, ETFs and bonds to hedge funds, real estate, angel investing and so much more. And because we all have different financial situations, risk profiles and preferred investing strategies, there is no one “right way to invest”. Any of these asset classes could potentially produce good returns, provided you make an educated investment.

In making an educated investment, there are many factors you may wish to consider — fundamental, technical or otherwise. These are all useful, but it can be overwhelming to keep track of this laundry list of requirements, especially if you are a frequent investor or you’re in a situation where you need to make quick decisions.

Sometimes it can be useful to consider things from the opposite perspective. Rather than thinking about what makes a good investment, instead consider what makes a bad investment. With that in mind, this blog explores some of the “red flags” to look out for when considering an investment.