Following the latest pyramid scams that are publicly known, the lawyer explains how we can detect a bubble in the world of investments.
Bubbles in the world of investments happen in economic sectors that are difficult to understand and understand by the majority of society.
It is said that in the world of investments, 90% of investors in new products have no idea how said product works or how it creates value. For example: investments in Cryptocurrencies, it is said that the majority, if not all, have no idea how they work or how much they are worth.
Today society normalized putting money in blindly.
Now, Detecting or realizing a bubble or pyramid scam is easy. The difficult thing is to control emotions so as not to get into it.or rather “the need and inexperience” of putting money where it is not known.
What are or would be the factors to realize that you are facing a scam or a bubble in the world of investments.
- Massive entry of investors with little experience (young people from 18 to 25 years old). This is the case of disruptive products and the fashion of the moment as crypto was and continues to be in 2021.
- New modes of assessment. When a new trend is sown in the world of investments, it is said that we are facing a new paradigm that does not follow traditional investment methods. It’s something different.
- Increases in fraud levels. Where there is quick and easy money, there are scammers. The last decade saw a series and a number of types of scams were carried out, Zoe, Vayo, CoinX, Kairos, among others, pyramid scams that promised returns impossible to give around the world. During this period, a sector of society puts on a blindfold and participates in absurd and obvious scams by attracting technology and social networks outside of traditional methods.
- Increase the level of debt to invest. When greed is great, debt is taken on in excess of one’s economic capacity, that is, not only of one’s money, but one looks for other options, for example: borrowing or mortgaging one’s property.
- High concentration in the same type of investment. You can see the same investment amount in all your investments. I mean, it doesn’t diversify, there are one or two products at most.
- A very rapid rise in assets. Any sharp or vertical rise in an asset does not indicate a healthy and clean environment, especially in the short term. It’s a danger. A rise in an asset over 10-15 years is usually a good deal, but in the short term it is usually a bubble.
Over 100 years the best investors in the world have tried it, first the enthusiasm and curiosity to continue learning day by day and be patient with your money, as well as the discipline to remain firm in the face of the multiple temptations with which the market will try to seduce you.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
