Should You Invest in Real Estate?

Should You Invest in Real Estate?

Should you invest in real estate? Yes, at the right time and in the right place. In the past, a greater percentage of individual investors in real estate have probably made money than have investors in stocks.

I am completely convinced that every able-bodied citizen should work toward either owning a home, a savings account, or common stock.Two-thirds of American families report they own their own homes.

Should You Buy Gold, Silver, or Diamonds?

Should You Buy Gold, Silver, or Diamonds?

Should you invest in gold, silver, diamonds, or other precious metals or stones? Some investors have lost a great deal of money investing in such commodities.

Many of these items were once promoted in a superaggressive fashion with little protection afforded the small investor. There was no SEC to protect against exaggerated, or possibly fraudulent, claims made by some dealers in precious metals. Many books were written boldly pre dieting gold would bolt to several thousand dollars and our country would go down the drain.

Do You Belong in Futures?

Do You Belong in Futures?

Should you speculate in commodities or other futures? Probably not. Commodity futures are extremely volatile and much more speculative than most common stocks are. It is not an arena for the inexperienced or small investor unless you want to gamble or lose money quickly.

However, once an investor has four or five years' experience and has unquestionably proven his or her ability to make money in common stocks, the "strong of heart" might consider this medium.

Should You Buy Foreign Stocks?

Should You Buy Foreign Stocks?

How about foreign stocks? Don't they have terrific potential? Yes, a few foreign stocks have great potential at the right time and the right place, but I don't advise individual investors to waste much time investing in foreign stocks.

The potential profit should be two or three times as large as that in a standout U.S. company to justify the additional risk of owning a foreign stock. For example, the player in foreign securities must understand and follow closely the general market of the particular country involved.

Should You Buy New Stock Issues?

Should You Buy New Stock Issues?

Should the average individual investor buy new issues on the initial offering? I don't generally recommend it. There are several reasons.

First, the few outstanding new issues are going to be in such hot demand by institutions that if you are able to buy them on the offering, you may only be able to buy a tiny allotment. If you can acquire all the stock you want, in many cases it may not be an outstanding issue.

Are Warrants Safe Investments?

Are Warrants Safe Investments?

Most investors should shy away from low-priced warrants. It is another complex specialized field that sounds fine in concept but which few investors understand. Warrants give a person the right to buy so many shares of a company's common stock at a specific price, up to a certain date.

Are Income Stocks Recommended?

Are Income Stocks Recommended?

I do not believe most people should buy common stocks for dividends or income. In theory, income stocks should be safer, but don't be lulled into believing they can't decline sharply.

People think utility and bank stocks are conservative and that you can just sit and hold them because you are getting your dividends.

How about Tax-Free Securities and Tax Shelters?

 How about Tax-Free Securities and Tax Shelters?

Should you consider tax-free securities and tax shelters? No, I don't  think the average investor should use these investment vehicles.

People seeking too many tax benefits frequently end up investing in questionable or risky ventures. The investment decision should always be considered first and tax considerations made a distant second.

Should You Own Convertible Bonds?

Should You Own Convertible Bonds?

I do not recommend that the average investor buy convertible bonds. Sometimes investors are attracted to this medium because they can borrow heavily and leverage their commitment. This simply increases your risk. Excessive leverage can be dangerous.

The theory goes that a convertible bond will almost rise as fast as the common stock rises, but the convertible bond will decline less during downturns. As it goes with most theories, the reality may be quite different.  There is also a liquidity question to consider, since many convertible bond markets may dry up in extremely difficult periods.

Short-Term Options Arc More Risky

Short-Term Options Arc More Risky

If you buy options, you are better off buying longer time period options—six months, or so. This will minimize the chance your option will run out of time before your stock has had a chance to perform.

Now that I've told you this, what do you think most investors do? They buy shorter-term options, 30 days to 90 days, because these options are cheaper and move faster in both directions, up and down!