The news spread a few days ago that retired Jamaican sprinter Usain Bolt’s $10 million retirement funds, which he has never touched since 2012, had been wiped out.
The fraud was perpetrated by an internal employee of his investment firm, who sold the investments of others, running into billions of dollars in all and provided them with fake reports. When he checked his account, he discovered that his $10 had been reduced to $2000.
Fraud knows no boundaries, and scammers have become more sophisticated and greedy.
There is a constant wave of attacks against people at all income levels. It has therefore become more imperative to take financial and investing literacy more seriously.
Generally, in investing, there are numerous techniques to mitigate investment risks.
There is a risk of losing money’s value (when you don’t invest) due to inflation and devaluation factors, as well as capital loss even when you invest.
When you do invest, there are a couple of things to keep in mind
-Have financial goals.
-Understand your financial situation and how much you can conveniently invest at a time.
-Learn about asset classes and investment types.
-Avoid jumping on trendy markets or supposedly trending investments.
-Consider working with a financial advisor who can help you identify and manage investment risks while also pointing you in the direction of relatively good opportunities.
-To lessen the influence of any single investment on your whole portfolio, you need to learn how to diversify your investments among a variety of asset classes, industries, and geographical areas.
-Depending on your risk appetite and investing objectives, allocate your investments among different types of assets in order to balance risk and potential return.
-Maintaining a regular evaluation of your portfolio and rebalancing it as necessary can help to keep it in line with your risk tolerance and investing objectives.
This right here is a very important point, because If Usain had checked out his portfolio from time to time, or delegated that function, he probably would have caught the anomaly on his account.
In summary
-Trust but always verify.
-Have a legal and financial team verify the information for you.
-Review your portfolio position regularly.
-Diversify
-Be an active participant in your financial decisions.
-Keep learning.
It’s also crucial to remember that all investments involve some level of risk and that no investment is fully risk-free. The key is to recognize these risks and manage them in accordance with your investing objectives and risk tolerance.
