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When You Want to Put Your Money to Work…

No matter how hard you analyze, stocks will surprise you.

A couple of years ago, I formed a stock investment club with some co-workers at my day job. The idea was to get together on a regular basis, learn about stock trading, present analysis about stocks of interest in a particular industry, use some of the club’s money to buy one of them, and then to track our progress. It wasn’t much money from any one member, but the club ended up with a significant account.

One of our first purchases was after a study of self-driving cars. We bought the stock of a company doing development with Tesla when it was just starting to rise. At its peak, it rose to 104% of our original purchase price. We didn’t sell. With Tesla’s troubles and the stock market roller-coaster, we’re barely back where we started with that one.

Recently we bought 1500 shares of a struggling retailer, thinking it would rebound during the holidays and we could sell it for a quick profit. The looming tariff war sent its share price over the cliff, so now we’re stuck with it and have to wait for it to limp back up or sell for a huge loss.

Another one of our buys was our pick from dividend paying stocks. Ironically, it’s doing the best – up 25% since we bought it. We chose it specifically for the dividends, which it’s also paying, so we’ll probably hang on to that one.

We’re sticking with what we know!

Now, what does all of this have to do with real estate investing?

Nothing. Except it presents an interesting contrast between investment decisions. Despite the nausea-inducing turmoil of 2008, real estate isn’t nearly as volatile as the stock market. The influences on the housing market take longer to manifest themselves. It’s not really subject to the same kinds of political or whimsical swings as the stock market, either.

Investing in real estate (at least the way Hermit Haus is doing it) does require a significantly higher starting monetary commitment than the stock market. However, there are other ways to invest in real estate besides direct property ownership (even if we’re fixin’-n-flippin’, we still own the house).

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Anyone Want to Dip Their Toe in the Water?

A few months ago, I started an investment club with some colleagues from work: http://leadbetter.strikingly.com/. We pool our money in an online trading account to invest in stocks, which we pick at our monthly meetings. At the meetings we also present research findings and learn more about the stock market. Collectively, we’re able to purchase more stocks than any of us could individually. It’s working well, and we’re all realizing the objectives of the club—to learn by doing—by investing in the stock market.

Anyone want to learn real estate investing as a group?

What about Real Estate Investing?

I’ve been wondering lately if it would be possible to form a similar club for the purpose of investing, as a group, in real estate. Obviously, the structure would be different, and the numbers probably larger, but I think the concept could be similar—by pooling our resources together, we could collectively do more than any of us could do individually.

If you’re interested, comment below, phone us at 512-807-8777 (Carol will pass the message on to me), or just send a message through our Facebook page. I’ve got experience forming these kinds of groups, but would appreciate input or advice.

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