Why do private investors lose their money regardless of the chosen trading instrument

Ted Capwell

After the transition to market relations, the issue of private investment has become one of the most painful for the economy of our country. Representatives of the older generation, who well remember hyperinflation, the unpunished “activities” of the organizers of financial pyramids, the bankruptcy of large banks, etc., have long concluded that the best way to save their money is to hide them at home, “under the pillow”. Naturally, previously, exchanging them for dollars.

That is, distrust of investment companies, private pension funds, large-scale business projects and other promising ideas (from the perspective of ordinary investors) remains even in our time (despite the fact that the level of economic literacy of the population, in the period 1991-2019, increased several times). Of course, many of our fellow citizens have changed their attitude towards investments, but these are few. If we conduct a survey (already in our time) regarding investments in securities, fiat and digital currencies, precious metals, raw materials, etc., we will see that most potential investors will not risk investing their savings in these projects.


Why do private investors lose their money regardless of the chosen trading instrument


Overview of the situation in domestic financial markets

If in the USA more than 50% of residents are private investors, then our fellow citizens categorically refuse to invest even in liquid financial assets. And the most interesting thing is that almost $ 20 billion is in the hands of the population! In 2017, approximately the same amount was invested in the country’s economy. Money does not work, its real value decreases daily (although some people do not understand this, proving that the dollar is not subject to inflation), it turns out that we voluntarily refuse to improve our financial situation. The injection of 15-20 billion dollars into the real sector of the economy is a real chance to change the situation for the better (these are new jobs, increasing incomes of the population, the return of our citizens from Europe, etc.). But all this is more like utopia, so let’s return to less joyful realities.

In this review, the main actors are private investors who invest their savings in trading instruments in order to make a profit. To gain access to assets, a potential investor must find a brokerage company that provides such services.

In addition to the above fear of losing your money, after posting financial resources on relevant sites, the following negative factors restrained future investors from this step:

    • Low level of trust in brokerage companies.

    • Lack of necessary experience and knowledge.

    • Legal aspects (there are no laws that govern this type of investment activity).

But one of the most important points in this case is the high probability of losing your savings, regardless of which trading instrument is used as an object for investment.

Recommendations of specialists and experienced investors

The situation that we have observed over the past 5-10 years cannot be described from the standpoint of traditional economic disciplines. On the one hand, individuals have huge amounts of money in their hands, but the owners are in no hurry to use them for profit. On the other hand, the administration of the trading floors, somehow very sluggishly trying to interest potential investors to invest in their projects.

Most likely, the main constraint is the lack of legislation guaranteeing the fulfillment of their obligations by all participants in the investment project. But this stalemate has long been used by adventurers and scammers, among whom there are a lot of talented and educated specialists. They know how to interest an investor, what to promise him, what methods will help to enter into trust, etc. As a rule, the acquisition of such “friends” ends, financially, very deplorably.

Minimization of possible losses and a real opportunity to earn on investments

Consider the main rules of successful investment activity (readers who have lost their savings will definitely see at what stage they made “fatal” mistakes).

    • Always study the trading tools you plan to work with. And try to answer the following questions: what factors affect their value, how much they are in demand in your segment, the approximate potential of these assets.

    • Risk, the duration of the transaction and its initial cost are key parameters for determining your earnings.

    • Never make hasty decisions.

    • Any (not even justified) suspicion is a warning that you should not take risky decisions.

    • Diversification of the investment portfolio is a great way to stay in the “plus” even with the most unfavorable outcome of the operations you are interested in.

But the main thing that every investor should remember is that there are no universal recommendations to make money on investments, regardless of the impact of other external factors.


“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”