In past articles in this HYIP Insights series, we have made many suggestions that we feel will be helpful to investors in their attempts to come out ahead in the HYIP “Game.”  In the way of a quick review, in HYIP Insights # 18, we discussed in great detail why investment plans that include your investment as part of a daily return are far superior to plans that don’t return your investment — and often your earnings — until the end of the investment period.  The first type of plan we call a “daily” plan and the second we call an “after” plan.  With an after plan, the investor is constantly biting his nails hoping that the program won’t close because, if it does, he will lose ALL of his investment and some or all of his earnings.  In a daily plan, from “day one” the investor is recovering his investment and earning money on it so that he will break even significantly before the plan ends.  So, if the program does close early, he will only lose a fraction of his investment, or maybe none of it at all if it closes after he breaks even.  If you haven’t read HYIP Insights #18 in a while, please take another look at it.  You will be glad that you did as the information in it is extremely important.

Still reviewing, you might want to also take a second look at HYIP Insights #21.  This article contains further suggestions for investing with HYIPs.  These suggestions are rather strict and can probably be relaxed a bit.  However, the concepts behind them are the important part.  You will have to decide how much you will relax the suggestions when investing.  I note that this article also refers back to the article in HYIP Insights #18.  This should further emphasize the importance of that article.

With all this as an introduction, I’d like to add another very simple recommendation for investing in HYIPs.  DIVERSIFY!  Or, as the saying goes, “Don’t put all your eggs in one basket!”  If all your eggs are in one basket and you drop it, everything is lost.  If you put them in two baskets and drop one of them, you only lose half of your eggs.  The more baskets, the better.  The same goes for investing in HYIPs.  NEVER assume that something is a “sure thing” and cannot fail.  ALWAYS diversify so that you can’t lose everything.

As an example, let’s take a look at an investment plan that pays 5% interest per day for 30 days.  We would rate such an investment plan very highly because it breaks even fairly quickly (in 20 days) and pays a return that we would consider to be sustainable in the long term.  Finally, it is a “daily” plan that enables you to recover your investment as part of your earnings.

However, the program sponsoring the investment plan can still close prematurely.  If it closes after 10 days, you will have only recovered half of your investment.  If it closes in 20 days, you will have just broken even.  If it lasts the entire 30 days, everything will be beautiful.  Suppose that you invested $400 in this plan.  After 10 days, you will recover $200 and after 20 days you will break even and recover $400.  By the end of the plan you will have earned $600, for a net profit of $200.

So, if the program closes in 10 days, you will have recovered $200 but you will also lose $200.  If it closes in 20 days, you will have just broken even.  Note that, if this were an “after” program, you would have lost everything in both these cases!

Now, suppose that you diversified and, instead of putting all of your $400 into one investment plan, you put $200 into two such identical plans.  So, with $200 (rather than $400) in this type of plan, you recover $100 after 10 days, $200 after 20 days, and $300 when the plan ends in 30 days.  For each plan.

Next suppose that ONE of these identical plans closes in 10 days but that the other survives the full investment period.  For the plan that closes early, you would have recovered $100 while for the plan that finishes, you will earn $300, for a total of $400.  Considering BOTH plans, you will have broken even in-so-far-as your $400 overall investment is concerned.  However, if you had put ALL of the $400 into the plan that closed in 10 days, you would have lost $200.

All this is common sense, I guess.  However, I hope that it emphasizes the importance of diversification.

An important note is that, on the other hand, you should not go “overboard” with diversification.  Don’t invest in excessively risky programs just for the purpose of diversification.  First and foremost, look for a high-quality investment program.  If you find one, invest a sensible amount of money in it.  Then look for another good program and, if you find one, invest again.  This is the way diversification should work.

In summary, first try to follow our recommendations concerning the types of investment programs that are best to invest with.  Then, second, look for more of them and diversify your investment “portfolio.”

I hope this information is helpful.

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