Why long-term investing is similar to buying a home

For many, investing in a corporation is more like a trip to Las Vegas than a commitment to their financial future. However, when you think about long-term investing consider the parallels between purchasing a home and selecting high-quality investments. For the vast majority of Americans, their most profitable asset will continue to be their home. We believe the reason for this success is twofold:

  1. Considerable care is taken in the selection of the particular property to be purchased. This thorough evaluation includes close inspection of the physical condition, floor plan and quality of construction as well as such attributes as the community, school system, recreational facilities, shopping, etc.
  2. Equally important is that the purchase of one’s home is viewed as a long-term investment. Therefore, the indiscriminate sale of the property does not occur based on the dire prediction of some “expert” that interest rates will rise, another recession is on the horizon or even a world economic collapse is imminent.

In reality, both a stock certificate and a deed are nothing more than legal papers that represent ownership. Just like you own your home, an investor owns part of a corporation selected for investment.  So don’t “buy stocks” based on a single phone call from a stockbroker or a tip from an acquaintance. Instead, meet with your financial advisor and commit to a plan that will help you reach your long-term goals.


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