Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
My Red Flags: 5 Warning Signs I Won’t Ignore in Any Investment
Ruby Layram
29th Sep 2026
I get asked a lot about what to look for in a good investment. Honestly, I find that the wrong question. After years of watching my own money, and plenty of other people’s mistakes, I’ve learned it’s far more useful to know what makes you walk away. Good opportunities are genuinely hard to spot in advance. Bad ones, more often than not, leave clues.
So here are my five, the warning signs that make me close the laptop and move on, no matter how good everything else looks on paper.
Also read: The best investments for beginners
1. I don’t understand how it actually makes money
This is my number one, non-negotiable red flag.
If I can’t explain, simply, where the returns are supposedly coming from, I don’t invest. Not because complicated things are automatically bad, but because “I don’t quite understand it, but the returns look great” is exactly the sentence that precedes almost every investment horror story I’ve ever heard.
Legitimate investments can usually be explained in plain terms, even if the underlying detail is complex. A company sells something, people buy it, profits get shared with shareholders.
A fund holds a spread of these companies. If an explanation leans heavily on jargon, vague promises of “proprietary strategies,” or a shrug and “just trust the process,” that’s not sophistication. That’s a gap where understanding should be.
2. The returns look too good, too consistently
Markets go up and they go down. That’s not a flaw in the system, it’s the entire nature of investing, and anyone who tells you otherwise is either wildly inexperienced or hoping you are. So whenever I see an investment promising smooth, consistently high returns with no real mention of downside, my guard goes straight up.
Genuinely strong investments have bad months, bad years even. If something claims otherwise, either the risk is being hidden from you, or you’re looking at numbers that simply aren’t sustainable. I’d always rather hear an honest “this could lose you money” than a suspiciously calm “this always goes up.”
3. There’s pressure to decide quickly
Nothing genuinely good requires you to decide in the next ten minutes. Nothing. If there’s language around limited spots, closing soon, or an insinuation that you’ll miss out if you don’t act right now, that’s not urgency, that’s a tactic, and a fairly old one at that.
Real opportunities can survive you sleeping on them, checking the details, and asking a sensible friend or adviser what they think. Anything trying to rush you past that step is trying to stop you from thinking clearly, and that alone tells you plenty about how it’d stand up to scrutiny.
4. The fees are vague, buried, or oddly complicated
I want to know, in plain terms, what I’m being charged and when. If that information is hard to find, wrapped in confusing terminology, or scattered across different documents so nobody quite adds it all up, that’s a red flag in itself, regardless of what the investment actually is.
Fees compound just as much as returns do, quietly eating into your growth year after year. A platform or product that’s proud of its charges will show them to you clearly, upfront, without you having to dig. One that isn’t, usually has a reason.
Read: The best investment platforms in the UK
5. It doesn’t fit anywhere in my existing plan
This one’s less dramatic than the others but just as important. Sometimes an investment ticks every other box, and I still walk away, because it simply doesn’t fit what I’m actually trying to achieve. Wrong timeframe, wrong risk level, or it duplicates something I already hold rather than genuinely diversifying anything.
An investment doesn’t have to be a scam to be wrong for you.
Sometimes it’s a perfectly decent opportunity that belongs in someone else’s portfolio, not yours. Learning to say “that’s not for me” about something entirely legitimate is its own useful skill, and one that stops your portfolio turning into a random collection of things that once seemed appealing.
Trust the pattern, not the pitch
Red flags rarely arrive alone. If you spot one, it’s worth pausing. If you spot two or three together, that’s not caution anymore, that’s your answer. The investors who avoid the worst losses generally aren’t the cleverest at spotting winners. They’re the ones who got comfortable walking away, early and often, whenever something didn’t quite add up.
If you’d like help building this kind of judgement properly, rather than learning it the more painful way I largely had to, that’s exactly what the MoneyMagpie Invest Courses are there for. £27 a course and you’ll be learning alongside well over a thousand other savers already doing the same. Head to moneymagpie.com to find the right one for you.
Your capital is at risk when investing, and the value of your investments can go down as well as up. This article is for general information and isn’t personal financial advice.
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