If you haven’t read it, The Intelligent Investor by Benjamin Graham is worth a read. It’s so good that billionaire investor Warren Buffet referred to it as “by far the best book on investing ever written.” It’s about value investing and avoiding “Mr. Market’s” irrational behavior.
Intelligent investing refers to an investment strategy of both economics and psychology. In this case, economics refers to understanding financial markets and managing assets and psychology refers to making cognitively sound decisions.
The intelligent investor has a financial plan
Investing isn’t a great-rich-quick scheme. When many people hear “investing,” they think “trading,” which isn’t what we’re about at all. Stock traders flip pieces of companies to try and make a profit. It’s risky and even the best are wrong most of the time. The intelligent investor understands that investing is a long-term strategy to meet financial goals and ensure one’s future, not become rich overnight.
The intelligent investor accepts the market for what it is
Dips and dives in the market are to be expected, even in real estate. Sometimes there’s a bad year and property values fall or it’s tough to find tenants. These are to be expected. The intelligent investor knows that the value of an investment needs to be understood over the long-term. He doesn’t make emotional decisions and pull out suddenly. He doesn’t make decisions on feelings or intuition; he uses hard data and remains focused on his goals and priorities.
The intelligent investor doesn’t pay others to lose his money
Many money managers don’t invest in their own funds or products they sell; they merely want the fees for moving your money around. You need a manager who has a reasonable fee structure, and one who puts his own money in the game – that’s how you can trust them.
The intelligent investor asks questions
Always keep this in mind: Past performance is not indicative of future gains. The intelligent investor asks plenty of questions and does everything possible to understand how his money is being spent. Insist on transparency and don’t accept vagueness from your manager.
The intelligent investor understands his own goals
Not all investors are alike. Everyone has different goals. Younger investors may want to keep their money in liquid assets so they can buy a house or finance their education. Middle-aged investors may want to maximize their assets and build a robust portfolio. Old investors may prefer investments that ensure regular income to finance their retirement.
Written by Mark A. Mascia, President and CEO of Mascia Development
Mark manages the investment and operating activities of Mascia Development, a diversified value real estate investment firm that acquires, owns and manages retail, medical office, family offices, multi-family, and industrial real estate properties in the most promising long term growth areas nationwide. Through crowdfunding, they create powerful real estate opportunities for high net worth individuals.
A fully integrated real estate company, Mascia Development has in-house capabilities in acquisitions, financing, re-development, and construction; and their principals have experience in property and portfolio management, leasing, and maintenance.
Mark has a strong career in real estate, previously managing a property of portfolios valued over $1.1 billion. Mark has worked at Archstone-Smith (a former publicly traded REIT) and Monument Realty, one of the largest office real estate developers in the Washington, DC metro area. Mark teaches real estate development and finance at New York University.
For more information, visit www.masicadev.com.
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