Most of the tools I use are tools to help analyze investments. However, some investments don’t merit a minute of your time. Early in my investing journey, my broker made me an offer. It seemed too good to be true. At a time when I paid him as much as $114.59 for a trade, he offered me shares of HA-LO Industries with zero commissions. I bought 100 shares for $3,200 in 1998. Those shares quickly became worthless. HA-LO went bankrupt. Why was the commission zero? Because no one would touch the shares otherwise.  It was my personal Enron.

If you believe every “good deal” that comes your way, you will find yourself wishing you had dug a bit deeper. There is no better tool to have on your investing workbench than a hammer called skepticism. Unfortunately, too many are too willing to believe every bit of information that is presented to them. Be skeptical if:

Something sounds too good to be true, then be skeptical. For example, if an investment promises to double or triple your money in a short period of time, you should smash that marketing ploy with the skepticism hammer.

The offer is based on a “secret” or a special technique.

It is a “limited time offer.”

The investment is only available to the “first one hundred” who ask for it, it isn’t an investment.

There are evasive responses to questions you ask, then it is time to be skeptical.

Early in history an offer was made that seemed delightful and “too good to be true.” It wasn’t true. “Now the serpent was more crafty than any other beast of the field that the Lord God had made. He said to the woman, ‘Did God actually say, ‘You shall not eat of any tree in the garden’?’ And the woman said to the serpent, ‘We may eat of the fruit of the trees in the garden, but God said, ‘You shall not eat of the fruit of the tree that is in the midst of the garden, neither shall you touch it, lest you die.’ But the serpent said to the woman, ‘You will not surely die. For God knows that when you eat of it your eyes will be opened, and you will be like God, knowing good and evil.’” – Genesis 3:1-5 (ESV)

Examine every potential investment with a measure of skepticism. That takes time. So be skeptical. There is no need to be in a hurry.