Despite the best of intentions, sometimes investments do not pay off. Many times they can devalue, close down, or even hinder the financial health of the investors. There are times when you should stay in for the long haul (like the the current devaluation of stocks) as the financial losses may be too great, but there may be times when it is better to abandon the sinking investment “ship” early on in the game.
The top five indicators of when you should bail out on an investment are:
1. You are struggling to make ends meet just to finance the investment
Although the goals of investing is for the investor to make money, many times unsavory financial advisers will push unwise investments on you in order to make money. Make sure that the investments you are pursuing match up not only with your long term goal, but your monthly budget, if not, get out!
2. Staffing Change
Everyday you call up your brokerage firm and get a different person handling your account. If the corporation handling your money cannot properly manage their staff, chances are they may not be properly handling your investments.
3. You keep losing money
If the transaction fees are eating up the entire profit from your investment and is starting to nibble away at the principal, pull your money and invest it more wisely elsewhere.
4. The investment is putting to much emotional strain on you
For years home ownership has be promoted as one of the best way for individuals to profit from their investment. However if you own your home, are struggling to make the payments and are losing sleep over it, it may be time to sell the property and move to a smaller, more affordable rental option.
5. The investment sounds to be good to be true
Any investment that promises huge returns for very little effort is probably more of a Ponzi Scam then anything else and should be avoided at all costs. However, if you believe you fell for one, try to get your money back as soon as possible and report the management team to the proper authorities