Step 4 of 8
Spot a scam and diversify
Spot an investment scam
Scammers love beginners, especially online. Walk away if you see any of these red flags:
- Guaranteed high returns, like 5% to 30% a month. Real investments can't promise this.
- Recruitment bonuses. If you earn by bringing in new members, it's likely a pyramid or Ponzi scheme.
- Not registered with the SEC. A business registration (DTI or SEC) is not a license to sell investments. Search the company on the SEC website and check SEC advisories.
- Pressure to decide now. "Limited slots" and "last day today" are there to stop you from thinking.
- Paid in cash or crypto to a personal account, with vague details about where the money goes.
Quick investment safety tips
- Start small.
- Only invest in what you understand, including how to get your money out.
- Ask questions and keep learning.
Don't put all your eggs in one basket
Diversification means spreading your money across different investments, so one bad investment can't wipe you out. Four baskets to consider:
1. Asset classes
Mix stocks, bonds, REITs and cash, with a small slice of anything high-risk.
2. Sectors
In your stock portion, own shares or funds that cover banks, property, utilities, consumer and more.
3. Geography
Pair Philippine assets with international funds.
4. Time
Peso-cost averaging: invest a fixed amount every month. This smooths out market ups and downs.