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

I Am Not a Hype Investor

I am not a hype investor.  I’ve seen it many times over the years.  People get hyped about a stock because of a media buzz or worse…a social media buzz, and get taken advantage of after they put all this money in the stock.  Whether it’s a penny stock or one on the major exchanges, there are folks who are going to inflate the value of a company in order to jack up the stock price and then cash out off of everyone else’s expense who have put money in believing the hype.  I’ve been there, I caught the hype bug over a penny stock and it did go up for a day or so off of the buzz, then it tanked and I lost some money.  One of my friends lost more than I did.  Thankfully I didn’t jump in with any large amounts.  

Take your time and study the value of a company over time.  If there is no information about the company on the web, then I wouldn’t invest in it.  Let the big spenders and cowboys have the wild west.  I’m investing to build wealth for myself and my family.  I look for bargains when prices of stocks go down and get in on the upswing.  I also focus on dividends for monthly income and overtime the value of my investments has grown.  Have a long term plan not a short term get rich quick scheme.  This will help you continue to add value to your investment portfolio.