Director-General of the Securities and Exchange Commission, Rev. Daniel Ogbarmey Tetteh has advised persons who have the get-rich-quick mentality to beware of Ponzi schemes and investments which promise high returns with low risk.
“Anytime anybody tells you that this return is high, sure banker, low risk, it’s likely to be a scam. Just look for the exit and run as fast as you can.”
According to him, there is so much risk in chasing high returns without understanding the tradeoff between risks and returns when it comes to investing in financial assets.
“There’s this culture or practice of people always asking, what is the best investment? Which one gives me the highest returns? Anytime there’s high return, it also means that there is high risk. Anytime anybody proposes an investment solution and they say that the risk is low but the return is high, please look for the exit door and run as fast as you can.”
Speaking on JoyFM’s Super Morning Show, Mr Ogbarmey Tetteh advised people who are lovers of high returns not to lose sight of the fact that it could go with some high risk.
“And when things don’t go well, then they start looking for an avenue to resolve their issues or someone to blame. It’s important that you understand that there’s a tradeoff between risk and return.”
Enlightening fervent listeners of the show on how to be financially independent, Mr Ogbarmey Tetteh said people should assess their risk tolerance levels before making any investment.
“Unfortunately, what many people do is a mistake. They just ask, what is the highest return I can get? And then they go without understanding that there is that a tradeoff. Risk must be compensated for. If you’re not taking a lot of risks, then you don’t really have to be compensated. Anytime there is high compensation, there’s high return, they may not be explicit about it but there is a lot of risks,” he stressed.
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