Investing in a stock is like buying a property

When you buy a property you look at the value versus the price.  You also look at the neighborhood because you can change the property but not the neighborhood.  You also have an inspection done check to see if the systems are intact (HVAC, roof, foundation, etc.).  Lastly you check to see previous owners and check to see if there are any outstanding liens.  

You should do the same for a stock.  The old adage buy low sell high always applies so check to see if the stock is overvalued or undervalued. Instead of the neighborhood check to see what industry and sector the stock is in.  Is this industry declining or going through a rough patch or is it likely to go up (like the marijuana bandwagon).  The “systems” of a stock are the management, facilities, infrastructure, etc.  Look to see the pedigree of the people running the company, are they competent?  How long has the stock been around? What have the returns been?

Finally, if you are going to put a whole lot of money into anything make sure it has some value.  The goal is to increase your holdings not to gamble.

Direct Real Estate Investing

If you've been following my blog you know that I've been a big fan of ARR which is a real estate investment trust.  Real estate has definitely hit a bottom and is on its way back up.  That means anything related to real estate (Home Depot, Lowes, Toll Brothers, Pulte and most of the REITs) will be headed up soon if they haven't already.

By watcharakun, published on 15 November 2011
Stock Photo - image ID: 10064745

Another way to play real estate is to actually own it.  I’ve found a new service that similar to crowd-funding, allows you to invest in the real estate market and actually own part of a loan.  This type of investing is what the big boys have been doing for a long time but the small players haven’t had access to it.  Now it’s available for the smaller investor and is giving even more returns than 401Ks and retirement accounts.  Plus it’s safer because it’s tied to an actually property.  Full disclosure: I’ve signed on as an affiliate. 

I highly recommend checking out this option for investing in real estate. 

You can check out my affiliate page and if you want more information fill out the email form on the side.

Here’s my page:  http://privatemoneyexchange.org/aff/williamsmithwes

Expanding the Topics

I'm expanding the topics that I'll cover in this blog to include other investments.  To do well financially you have to diversify your portfolio and include other things than stocks.  Real estate is probably one of the best investments you can make simply because you can rent a property even when it's value may be low.  The key however is finding a property that is in a good location and is "rentable."

Another investment to consider is owning copyrights or patents.  These investments can gain significant value overtime and the other good thing about them is that just like a property you get residual income in the form of royalties.

One last investment to consider is artwork.  If you can get art from an up and coming artist you will have a good investment that will increase in value overtime as that artist's career gains traction.  The key is finding an artist who is getting to be well-known.  Check to see where and when the artist has done exhibitions and if there is any press out there about them.  Have they won awards and have they done any high-profile installations? Also you can see who they studied with or what collectives or associations they're members of.  This will add value to their art over time.