Investing responsibly is the key to making your investment journey both enjoyable and sustainable. Here, we will provide you with information and resources to help you avoid the pitfalls of irresponsible investing.
Only invest what you can afford to lose
Investing all of your money can appear to be attractive, especially when your investments are turning a profit. However, it is important to remember that investments can be difficult to liquidate if you suddenly need money. Always make sure you have some money set aside for emergencies.
Shorting offers investors the opportunity to profit during a bear market, but it carries with it potentially unlimited downside risk. Shorting involves selling a borrowed coin, and aiming to buy it back for a lower price, keeping the difference as profit. However, if the coin’s price increases, the borrowed amount must still be returned. As there is no ceiling on the coin’s price, potential losses are unlimited. New investors should exercise caution when shorting.
Unlicensed exchanges and brokers
We always recommend that our readers use licensed and regulated exchanges and brokers only. While unregulated platforms may not require you to provide identity documents and may offer lower fees, they do not fall under the purview of financial authorities, and as such you are not protected when you interact with them. Investors should stick to regulated exchanges and brokers at all times.
Risking excessive amounts of money can damage your family’s finances, get you into debt, and take a toll on your mental health. It is imperative that you take this into consideration, and remember that capital is always at risk when you make an investment. Seek help today if you are suffering.
We have compiled a small list of resources that touch on some issues related to investing responsibly.
Money Advice Trust — For debt advice
Which? Investment Risk Guide — For information on balancing investment risks
Investopedia Shorting Guide — For information on the risks of shorting
Mind — For help with mental health issues