The recent peril of Carillion is a timely reminder of the importance of keeping a keen eye out for warning signs when investing in shares.

The construction firm plunged into compulsory liquidation earlier this month after racking up over £900million in debts and a reported pension deficit of £600million. Its assets will now be sold off and distributed to its creditors.

Ordinary investors were some of the biggest shareholders in the failed company. They held 16 per cent of shares through DIY investment platform Hargreaves Lansdown, around 7 per cent via the Barclays Smart Investor and the same again through Halifax Share Dealing. 

But they weren't the only ones to get caught out, some fund managers and institutional investors also had their fingers burnt.

http://www.dailymail.co.uk/money/diyinvesting/article-5303415/How-spot-investment-trouble.html