A new investment pitfall for your retirement savings is looming on the horizon.
This one looks so innocent, many are already jumping in with both feet.
Especially those who already saw huge losses the past five years.
I'm not talking about some "high-flying super-return guaranteed" kind of investment, either.
If your money manager or broker were to start telling you about an investment that offers very solid but conservative returns (think 7%-10%) and you'd already taken a big hit on your retirement savings, how interested would you be in an opportunity to jump on board? Especially since it seems like a solid, safe way to rebuild what you've lost.
What is this newest rage in investment for those looking to rebuild their retirement savings? They're called "private placement investments" - PPIs.
They often promise to pay interest monthly or quarterly and seem like a safe bet.
Trouble is, these can be risky business, as any private equity company can be.
Such was the case of one couple whose broker convinced them to sink $470,000 of their retirement money in a "partial ownership in a fleet of luxury cars.
" These private placement investments are largely in unproven, private companies.
No track records and no guarantee of performance.
It used to be that PPIs were offered only to big time investors.
But now, thanks to bundled investment trusts, and "ownership shares," folks with less than $500,000 to invest can easily join in.
The biggest type of PPIs are still REITs - Real Estate Investment Trusts.
Bundles of mortgages and real estate holdings.
Where most REITs used to be traded openly on the stock market, many new one are privately traded.
Which can increase your risk substantially.
If you're thinking of sinking some of your savings into a PPI, consider it "play money" rather than "essential money.
" This will minimize your emotional losses in the event the investment tanks.
Here are three more tips to help you out:

1. Invest no more than 30% of your entire savings in PPI investments - and definitely no more than what you can afford to lose.
   If an additional 30% loss of your principal would give you heart palpitations, then go with a lower percentage.
   
2. Of that percentage you invest, be sure to diversify.
   Stick no more than 10%-20% of the whole pot of "fun money" in any one company.
   If you've got $100,000 to invest, then divide it up among 5-10 companies to even out your risk.
   
3. Have an independent professional review each underlying company's financials - not just the broker or professional recommending the investment.
   That way you have a "whoa" guy to counteract the "go" guy if there are any red flags about the company's feasibility or sustainability.
   

Rebuilding after a big financial loss like you may have experienced in the past 4-5 years can be challenging.
But even the investments that look "safe" could wind up costing you if you jump in too quickly.
Case in point - I invested $100,000 in a friend's alternative energy company.
Three years later, the company still hasn't paid out anything and they're teetering on the edge of shutting down if they can't find a buyer.
In the best situation, folks will get out 70% of what they put in.
In the worst scenario, they'll lose it all.
Don't just accept that a conservative investment is a good bet.
Do your homework and be comfortable with the possible risk of losing it all so you don't get blindsided if the worst scenario happens.