Investors having traits such as being highly emotional or overconfident are drawn to risky investment options and may be at high risk of being swayed towards gambling

This type of investors are likely to be drawn to highly risky investments There are also certain investment options which provide an adrenaline rush, but one must tread with caution as they can also lead to huge losses

Investors often get lured into risky investments which may seem attractive at first but can lead to huge losses if the fine line between investing and gambling is crossed. Investors with certain personality traits are more prone to making risky investment choices. Here is what you can do to avoid getting drawn to gambling on risky investments.

Investors should stay away from high-risk investments if you have these traits.

Highly emotional: You feel the highs and lows very acutely.
Instant gratification: You cannot wait too long for rewards and returns.
Low boredom threshold: You are an adrenaline junky craving excitement and stimulation.
Escapism: In trying to escape an unpleasant situation or emotion, you turn to excitement.
Impulsivity: You act and react without thinking about consequences.
Overconfidence: You are extremely positive about results and feel that the odds are always in your favour.

Also read | Are you investing or gambling? How you can avoid losing money to risky investment choices

These complex investment options provide an adrenaline rush, but can lead to heavy losses.
Day trading: The fast pace and high frequency of trading, where securities are bought and sold the same day, draws in investors looking for the high of instant gains.

Futures & options: These leveraged products can offer very high profits, but also heavy losses. The gains pull in investors who rush in without understanding their complexity and suffer big losses.

Unlisted stocks, startups: The thrill of chasing the unknown attracts investors who ignore high risk and enter with poor research or any idea about outcomes.

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Cryptocurrencies: Again, lack of knowledge about how these operate and the lure of instant gains draw investors who want to make a quick buck.

Penny stocks/small caps: The high volatility associated with these products is often overlooked by investors who are banking on the possibility of outstanding returns.

This story originally appeared on: India Times - Author:Faqs of Insurances