How To Invest: Two Rules You Need To Know

The Rialto Building. One of Robert Kantor’s historical and very successful commercial real estate investment projects. Courtesy of

by Robert Kantor

Have you ever suffered from anxiety soon after writing your check to pay for an investment? Have you forfeited more than a few nights of sleep worrying about that investment? Maybe you lost money on a stock or limited partnership investment that your broker hyped as a “hard to come by” portion of a “you can’t lose” deal.

If you’re like most investors, such experiences arise from the role that reliance on luck, and random chance have played in investments. It is possible to invest with confidence and regain your peace of mind and a strong return on investments by following my two bedrock investing rules. They apply to any investment, including commercial real estate and are followed by the most successful investors.

  1. First, invest only with the most experienced and successful individuals. Such individuals have the highest integrity and intelligence, superior specialized expertise and instincts, and business managerial abilities. Invest only when these people are professionally and financially committed to a well-conceived project that has an anticipated economic return that will well-compensate investors for the risk entailed. More on identifying experts and instructors is forthcoming in a future post.
  2. Second, before making any investment decision, conduct exhaustive due diligence. Due diligence is the research and analysis of a company or organization done in preparation for a business transaction (such as a corporate merger or purchase of securities). Investment and financial professionals use the term due diligence to refer to an investigation or audit of a potential investment to confirm all facts, such as reviewing all financial records, plus anything else deemed material.

Every investment opportunity requires some amount of independent due diligence on the part of a prospective investor. If the size of your investment does not justify taking the time to complete due diligence, decline to invest.

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