In the business of making money through investments it is essential to pick profitable investment vehicles. Whether you are interested in stocks or real estate, US Treasury bills or corporate bonds, you need to look at expected return and appreciation, security of the investment, and the cost of doing business attached to the investment. It is possible to pick profitable investment vehicles that require you to give up your day job in return for a change at a profit. It is also possible to pick profitable investment vehicles that offer a more slender rate of return but also a good night’s sleep and very little of your personal time. You can go to an investment advisor in search of sound investment advice but then you must consider that when they pick profitable investment vehicles the profit may have more to do with their commission than your return on investment. It is possible to pick profitable investment vehicles in a variety of arenas but no matter where you invest, sound fundamental analysis is paramount. No matter where or how you invest, intrinsic value and margin of safety are important when you seek to pick profitable investment vehicles.
How Much of a Return versus How Much Risk and Worry
There is a sound reason why people put money in the bank, roll over CD’s, and ignore real estate and the stock market. It is easier than doing a lot of research, comparing prices, maintaining a balanced list of investments, and waking up in the middle of the night to worry about a stock or real estate market crash. Put money in the bank and keep the total for each bank at less than $100,000 and Federal Deposit Insurance covers your investment risk. If you set up a ladder of CD’s there will be money available every few months. If you simply keep a reasonable amount in a saving account there is cash for immediate use. Keep money in the bank and don’t try to pick profitable investment vehicles that require a lot of work and worry. Don’t worry about pulling money out of investments for expected expenses. Sleep well at night.
There are also, obviously, excellent reasons to look outside of the “bank account only” mind set for investments. A wise investor wants a rate of return that beats inflation. He wants a rate of return that allows his initial investment to compound over the years and provide for a comfortable retirement or even substantial wealth to enjoy and pass on to his children. For the investor who is interested in setting up his own business, investing in stocks, trading commodities, or investing in real estate, there are a multitude of opportunities. There are rational ways to pick profitable investment vehicles. Many investors avoid putting all of their eggs in one basket.
A best and first choice for a solid investment is to buy your own home. The mortgage interest is tax deductible and you get to live in your investment. The next best choice is paying off debt. Credit card debt runs around $18 percent per year. There are times when beating 18% in the investment world can be tough. The next best choice is to go with what you already know. Pick profitable investment vehicles in areas where you have some expertise. A realtor should be investing in real estate. A doctor or pharmacists should be looking a pharmaceutical and biotech stocks. A farmer or rancher may do best dealing with commodities, or farm and ranch land. Foreign real estate investments can be profitable, especially if they are in your nation of origin. Start with what you know when you want to pick profitable investment vehicles.