Does online investing take us for mugs or are we just risk takers?

Over the years that I’ve been investing online I’ve noticed that those who use vitriol to discourage others generally believe they are doing something for their benefit. They are quick to call any online investment a scam and warn everyone to steer clear.

Their arguments often centre around the belief that many of the returns offered online are impossible to achieve, hence untrustworthy. The question of course is what qualifies them to make statements like this and what, if any, notice we should take of them.

Of course everyone must come at this from a personal perspective and my own stimuls for being involved is as a reaction to the abysmal interest rates available from the major banks and financial institutions. It always seemed odd to me that the pittances you are offered to leave your money in a savings account earned such a poor return and I was convinced that more profitable ways must be available.

As I’ve learnt more about the field of online investing I’ve even more convinced that good returns are possible and accept that to achieve them you must be prepared to take more risks.

However trustworthy an online investment demonstrates themself to be there is always the potential for unforseen circumstances occurring that make it difficult for the online programme to function whether that is just for a short time or for ever.

Many investors who see the allure of higher interest rates don’t fully appreciate the sort of problems that can occur. This lack of awareness can create panic if something they are not expecting happens. If the programme Admin does not respond quickly the result could well be a fall off of confidence and ultimate demise of the programme.

I still see too many people using online investing as a source of funds for short to medium term bill paying and that is not what it is designed or sensible to use for. Yes, higher interest rates are possible but the returns are not necessarily ATM fodder. Investors need to plan things on a longer term basis and give the programmes time to use the funds in the most efficient manner.

At the time of writing there are several programmes that if they payout will provide large sums of money to their members for relatively small investments. These are especially targeted by sceptics and whilst I do understand why they may see them as scams it doesn’t give them the right to dictate to others whether to invest in them or not.

Online investors are adults who are never forced to partake in these types of investments and choose to do so of their own free will. To me that suggests they are risk takers rather than being duped by scamsters. Of course some of the programmes may fail and fund lost but that’s the risk we decide to take.

Warnings about the Madoff crisis weren’t rife before the collapse and many people lost their life savings to a so called respectable investment advisor. Personally I would never put all my investment funds in one place and perhaps the world of online investing has reinforced that maxim over the last few years.

I don’t consider myself a mug but I do know I’m taking calculated risks and am happy to do so.