How often have you come across tons of screenshots stating heavy profits picked out from trading in stocks? These images have flooded the internet during the post pandemic period where everyone wanted to try their luck in markets during the lockdown phase. If you haven’t seen such profit screenshots, either you are not active on social media or you might have been lucky to stay away from nuisance, literally!
The modus operandri for scammers is simple: post pictures of lucrative profits on social media and get some attention. There are plenty of apps on the internet which help the scammers to edit profit screenshots. People having inadequate knowledge will approach them to maximize their returns on investment and they would get returns for sure in their 1st trade. This is done by all scammers to gain trust. But the moment you increase your investment and money supply, the scammer will disappear, block you and will never appear again. All the investor could do is regret his decision to make such a bad move.
But a question arises, what makes people fall for such traps? Are they doltish? Is the scammer a known person to them or for what other reasons?
The two answers are greed and lack of knowledge. Greed being the primary one and inadequate knowledge follows it. There’s another follow-up reason for it, which is: people who have already lost money, want to earn it back and look around for people to help them.
The Indian audience has witnessed a massive wave of new investors who came into the picture after watching videos of social media influencers. The stories of successful investors who hailed from humble backgrounds but arose to financial freedom via perfect investing decisions. These are the same stories repeated by almost everyone. The fact everyone fails to acknowledge is that these successful people account only for the top 5% to 10% of total population. 90% have failed to maximize their wealth for the same reasons stated above.
Inspiring stories lead people to other social media platforms like twitter where the number of profitable traders increases manifold. For someone new, it is next to impossible to find someone who has lost money in markets. Everyone shows a profitable trade because a loss-making trade could impact their credibility and social value. Among the few genuine traders, hundreds of scammers find their place. They will reply to everyone as to get that one innocent new investor who wishes to learn something new and earn a few bucks, but instead pays a hefty price by getting scammed.
Now, infact, the stock scamming stories are days gone by. The new safe-haven for scammers is cryptocurrency. As many would know, cryptocurrencies are very difficult to trace back. For this very feature, scammers love using it. Routine is the same. Take money and disappear. But while making bank and UPI transfers, the bank acts as an intermediary so it’s comparatively easy to trace back but cryptocurrencies have a simple unique id and no intermediary, so it’s a lost case for someone getting scammed.
Since, almost 95% crypto investors are teens and young adults, their impatience and rush to get rich quickly leads them to a massive financial downfall.
While concluding this article, I would say one should not run away from investing. It’s the key to unlock financial freedom. But one must not avoid learning primary concepts and staying aware about potential scams happening around them. If you wish to skip DIY investing, find someone qualified and trustworthy whom you can rely upon to pick stocks on your behalf and create a diversified portfolio. A well-diversified portfolio eliminates 90 % of market risk.
If you wish to learn more about investing, you can have a look at articles under Beginner’s Guide section of this site. Till then, Happy Investing!
Finance graduate with a strong desire to understand the complexities of financial markets. I make financial judgments for my investments based on the information I gained during my academic education. I write articles about financial literacy for dstreetanalyser.com in order to promote financial literacy among the general public.