Though it may sound simplistic, real estate and stock transactions both require a buyer and seller. Both involve an opinion of value that may or may not be accurate.
Evaluating a house before moving forward takes some effort, similar to assessing the value of a business. And as any home owner will tell you, there are many unknowns that can drastically impact the return on investment.
That house you fell in love with might just be a pig wearing lipstick (caveat emptor). The financial statements of a business might also be hiding some issues (think Enron).
There are specific types of paint designed to cover up a leak on a ceiling. Similarly, there are a variety of creative accounting techniques that can make a terrible business look attractive.
So how do you know whether it's time to make that leap or sit back? Exercising the wait and see approach is harder than it sounds, for me anyway.
Taking the time to kick the tires is always a solid idea. Along with hiring a property inspector, I research property information using the following services:
- Zillow Research: Use their Housing Data library to track local market heat and rental demand trends.
- Redfin Estimate: A solid first step for a free, data-driven opinion on a home's current market value.
- Realtor.com Data: Excellent for deep-diving into neighborhood-level inventory and sold-price history.
For stock research, I use Schwab, TipRanks and Benzinga.
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Best Online Brokerages
Schwab has been my favorite for many years. If you use this link, you can get up to a $1,000 bonus for opening a new account. Schwab has one of the best free trading platforms, Think or Swim, and an extensive library of learning content.
There are many other online brokers, however, and some have managed options that are very reasonable. One of the best could be Wealthfront. It's a financial services company based in Palo Alto that has been around since 2008.
Wealthfront has an automated investment advisory service that is only 0.25% per year.
With an Interactive Brokers account, you can get up to $1,000 for opening a new account, and some IBKR stock. I opened an account last year because it's the only brokerage I've found where you can place a stop-limit order that works after hours.
Interactive Brokers also has algorithmic trading, premium research and news providers, and nearly every conceivable investment product under the sun.
Robinhood is one of the simplest brokerage platforms out there. I opened an account with them because they have the lowest margin rates I could find anywhere, and the first $1,000 in margin is free for Gold account holders.
This post contains affiliate links. If you sign up for a service through one of these links, I may receive a small commission at no additional cost to you. I only recommend tools I personally use.
I am not a financial advisor. The content on The Pinnacle is for informational and educational purposes only. Investing involves significant risk, including the loss of principal. Always do your own due diligence and consult with a certified professional before making any financial decisions.
