The first lesson a student learns about investment is the saying that one should never believe in gimmicks. This statement, professionally, means one should never trust in investment offers with exaggerated imaginary profits.
Logically, there are no legal investment opportunities around the world where the interest is very high. If the myth is real, people would have competed with their capitals to earn the great interest and then go back to the normal level of benefits.
That does not mean there are no short-term investment opportunities that give back huge amounts of money, but they are usually rare opportunities.
I intentionally included this introduction because of what I read on a weekly basis. People are collecting and investing their money believing that they will make millions and after a few months, they go bankrupt or they claim to go bankrupt.
I don’t blame the majority for competing to make use of this type of investment whether in the stock market, real estate, commerce or anything else. They have been given notions by the investment manager that they will make huge profits at the beginning of their investment life. Soon the illusion fades away because the investment is an illusion.
And no matter what this person’s IQ is, he won’t be able to achieve what he was promised. The person who received the 2006 award for the best portfolio investment manager didn’t get more than 23 percent of benefits annually.
I have warned so many times, whether through media outlets or conferences, against this type of investment. These habits and practices don’t harm the investor only, but they negatively influence the national economic growth and its credibility. I have suggested many solutions to solve the problem of collecting some companies’ capitals to serve illusionary projects as follows:
Adjusting the company’s system so that it clearly allows establishing investment stock companies, forming the basic foundations for the structure, the management and the strict supervision.
Establishing an independent administration that follows the Ministry of Commerce that looks after these companies and whether they abide by the regulations or not.
Establishing civilian and criminal penalties for company managers if they violate the regulations.
The suggested administration should effectively and quickly liquidate unlicensed companies and funds and then return the money to whom it belongs.
Incorporating these companies within the financial market with the contribution of the Capital Market Authority in implementing the regulations.
I believe that the final license for these companies (as in insurance companies and banks) must be issued by the Council of Ministers. I hope that my suggestions, or at least some of them, will be taken into consideration.
