Why It's Important To Scrutinize Your Investments

Author Aventur • 11th Nov 21

Do you research potential investments before investing your money with them?

If you don’t, you probably should. The unfortunate truth is, if you don’t properly scrutinize your investments, you could end up losing some or all of your money. But that doesn’t mean you shouldn’t invest at all - it just means that care should be taken before you do.

Investing isn’t like saving. It can yield far better results, but it also involves a far greater degree of risk. The fact is all investments are risky, so it is important to determine if the potential reward is worth the level of risk. If you intend to purchase securities (i.e. stocks and bonds), the risk is especially high because the money you invest is generally not insured. So, if something bad happens to the organisation you have invested in, your money disappears into the ether.

Sadly, that “something bad” happens all the time. Take the recent energy collapse, for example. Nine relatively new energy companies (including Igloo, People’s Energy, and Utility Point) recently folded after soaring wholesale energy prices put pressure on their ‘low price’ promises. Perhaps the biggest impact of the industry’s collapse so far has been felt by those that invested early in these up-and-coming organisations.

Even if you chose to invest in a company that thrives, other non-financial issues may arise. For example, you might invest in a company that claims to be environmentally and socially conscious, only to find out later down the line that its primary investor is linked to some pretty shady business. With “greenwashing” at an all-time high, it is important to ensure your potential investment checks out. After all, any company seeking to attract investors will be keen to show you the best side of the business, so they may well omit some of its less alluring attributes. This is why you must do your own research to ensure you get the full picture.

Finally, in order to ensure your investment portfolio is working as hard as possible for you, you should ensure that any investments you make align with your financial goals. If you have a financial goal with a long time horizon, you should consider investing in organisations looking for long-term investors. This may mean you don’t see the benefits of your investment for quite some time, but the reward will be greater in the end. However, this all depends on the business making it to the end in the first place, and remaining in line with its original plan along the way, which neither you nor the organisation itself can guarantee!

Is all this research beginning to sound a bit daunting?

Don’t worry, we’ve got you.

At Aventur, we scrutinize all of our approved investments to ensure they meet a strict set of criteria before recommending them. This means no greenwashing, no questionable business plans and no companies that don’t align with your personal values. So when you invest with us, you can rest assured that your money is safe.

Interested in getting started with investing? Get in touch today to find out how we can help!

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