The economic downturn in recent times has eaten deep like cancer into the economic activities of many nations. While those in the developed countries seem to be overcoming it at a fast rate, those in the underdeveloped and developing countries like Nigeria are still not making any serious progress.

Many businesses have folded up and new ones are finding it difficult to sprout and be sustained. People with different business and investment ideas are at a loss about what to do as they don’t know what will happen next if they invest in any venture.

You see investing money to make money always comes with risk. If you’ve got a high-risk threshold and have therefore a lot of business investments, then your return can go either way. This is the roller coaster ride risk-takers enjoy. The potential for a healthy profit is the core driver, and the risk is somewhat mitigated with the right investment strategy.

Fraudsters are innovative professionals, constantly reinventing their scams. When fraud happens, victims are left not only with a financial loss but compromised identities and emotional distress as well.

Therefore, your online security starts with you and your device, internet access, and password security. Make sure you’re not accidentally allowing malware to infect your computer. Run antivirus scans and always apply software updates.

How to Avoid Investment Frauds Online

Ask Questions

Fraudsters are counting on you not to investigate before you invest. Fend them off by doing your digging. It’s not enough to ask for more information or references, fraudsters have no incentive to set you straight. Take the time to do your independent research. For more information see Ask Questions.

Research before you invest.

Unsolicited emails, message board postings, and company news releases should never be used as the sole basis for your investment decisions. Understand a company’s business and its products or services before investing. Be knowledgeable regarding online and offline business opportunity scams. Research must be done on the industry to which the business opportunity pertains. You can look for things like what are the average returns in the industry. Compare these returns with those offered by the new business opportunity. 

Make sure you only go for those opportunities that are offered by reputable sources. Sources that you’ve never heard about are not safe and must be avoided. You can also ask your friends, family members, and peers regarding the opportunity and its viability.

In any case, the company must be registered, and the business must be legitimate and legal. In this scenario, when you file a fraud case against the company, there are higher chances that you’ll win.

Refuse to be rushed.

Marketers or stockbrokers should not pressure you to make an immediate investment decision. If the person cannot explain in detail what the investment is all about and give you time to understand it, then say NO!. You have the right to access the firm and the investment opportunity. If it is shared for instance the company must be quoted on the Nigeria Stock Exchange (NSE). Before you even consider investing, get the prospectus, review it carefully, and make sure you understand all the risks involved. But remember, even written material sent from the promoter can be fraudulent or misleading.

Always stay in charge of your money.

Don’t be taken in by anyone who wants your money and assures you that he or she is a professional and can handle everything. Beware of any financial professional who suggests putting your money into something you don’t understand. And never let yourself be talked into leaving everything in his or her hands.


Avoid putting all your money into one type of investment or one stock. All your eggs in one basket is a risky strategy. Many investors get stuck with one asset class as it’s the only investment they understand. The answer here is to learn more about different asset classes and types of investments. Learn about investing online, join discussion forums, read articles, and follow investors like Warren Buffet.

Spreading the risk prevents you from losing everything you’ve invested if a stock goes sour or there is a stock market crash, and all you had were stocks. When you are well diversified, your assets will include property, businesses, stocks, and so on. Investing in businesses and property is the stable of high profile investors, and if it works for them, it should also work for you.

Have an Emergency Plan.

Nobody wants to think about something going wrong with their business investments. But, as we have discussed, there is always a risk with everything you do including leaving your money in the bank that action is risky insofar as it may give you a negative return if interest rates are negative. Negative interest rates are a reality, and it can cost you to have your money in a bank.

Think Rationally and Not Emotionally While Planning

At times, scammers play with your emotions. The feelings here are associated with earning big in a small amount of time, with minimum investment. This isn’t financially feasible, and no one is willing to give you unrealistic returns for low investments. Sometimes the business opportunity is your dream venture. Like opening a coffee shop or anything that you’ve always desired. 

Remember that the scammers know about your inclinations and can play on them. Therefore, avoid taking an emotional decision. It’s quite common for swindlers to pitch their schemes as a way to build up life savings to the point where such fears are no longer necessary.

Be Sensible and Trust Your Gut

The number one thing you can do when you are thinking about your business investments is to be sensible. Do not make any quick and rushed decisions. Take your time with your next move. Listen to the experts and do as they do. A lot of people ignore their intuition, while others rely solely on it. Do neither, use it but always exhaust all measures mentioned in this article to ensure your investment decision works for you and your business.

Also trust your instincts in these matters and probe whether the party extending you the opportunity is making any money. If it’s not making any money or the margin is so low that it’s unfeasible, then most probably it’s a scam. 

In conclusion, appearance is not reality – Successful fraudsters sound extremely professional and can make even the flimsiest investment deal sound as safe as putting money in the bank. They swindle people by the way they look professionally and talk convincingly. Remember that sincerity in a voice, especially on the phone, has no bearing on the soundness of an investment opportunity. Always do the necessary homework.

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