Investing on your own can be interesting, challenging, and humbling.

Our approach to investing consists of building diversified portfolio models and using a combination of active and passive mutual funds and ETFs (exchange-traded funds). We have had solid long-term success in keeping clients invested at a risk level they are comfortable with and that over time should allow them to reach their goals. Successful investing is measured over decades. Investors who become frustrated if they don’t “beat the market” every year will find themselves changing advisors and strategies every few years, seeking that perfect solution.

We also invest in individual stocks, something many advisors are moving away from. Our feeling is that it is important to have a real understanding of markets, and owning individual stocks gives this understanding. If all you own is funds, you may really not understand why your fund is outperforming or underperforming—it is all about the individual stock holdings in the fund.

Real Estate Investing

Buying real estate at low prices is one way to potentially earn outsized returns.

Real estate does have powerful advantages as an investment, as it provides both leverage and tax minimization. But for me, the time required overwhelms those advantages.

Control through personal management of the investment is another clear advantage of privately held real estate over individual stocks. As an investor, you need to think about the opportunity in front of you and how you want to spend your time. Are you entrepreneurial? Do you live in an area where there are great real estate opportunities?

Most areas have real estate opportunities at different times and in different types of properties. You first need to determine if you have the time and skills to identify the type of properties that would be advantageous and to then manage the properties. Just be mindful of the value of your time, and of course, be aware of the risks.* An investor thinking about real estate should be reading extensively to thoroughly understand this type of investing.

Opportunities Disguised as Investments

Most of us understand the difference between an asset and a liability. Assets make money; liabilities cost money. To build wealth you want to invest in things that grow in value rather than assets that have high expenses and probably will have modest appreciation. Remember, the point of an investment is to make money. It should not be something that might allow you to break even but will probably cost you money. Let’s take a look at some things that are sold as investments but are not.


Investors often wonder whether they should buy a condo in Florida or at a ski lodge or perhaps a cottage at the lake. A second home or a vacation home is an attractive idea if you want a place of your own to stay when you travel to your favorite places. You may forecast that you will rent the property for the remainder of the year—but the challenge is that, typically, rental demand is seasonal, and units often will sit empty for six months or more out of the year. You need to charge premium rents during the high season, and this means that you are not able to use it during this time.

If you have the resources to afford a vacation property, that’s wonderful, as long as you understand that this “investment” could well be a financially unproductive one. It can be expensive to maintain as well.

The reason to buy a vacation property should be that you and your family will be using it often for your own pleasure. Be cautious about convincing yourself and your spouse that a seasonal property is an investment. The family time at the cottage for all of us is priceless, but it is not inexpensive. Certainly on occasion investors buy such properties during deep recessions, and they can be investments. Timing is in this case critical, and you may need to sell it when it appreciates to minimize the costs that will drag down your returns over time.


When buying a timeshare, you are buying access to a resort and, in theory, fractional ownership of a property. It’s nice to have the prospect of locking in a desirable week every year at accommodations that are much better than a hotel room. However, consider the downsides:

  • Timeshares have high annual maintenance fees.
  • It may take a lot of effort to actually snare a desirable week, as high season weeks are in strong demand.
  • Your ability to resell the timeshare is, in many instances, nonexistent. You’re better off if you do not think of timeshares as an investment. Think of it as prepaying some of your vacation costs with the chance to lock in a desirable location and week. Be sure that you understand the long-term costs. Consider whether you might be better off using the money that you spend on a timeshare to invest elsewhere. However, sometimes you simply cannot get a hotel that in any way compares to what a timeshare offers at a particular location. In that case, a timeshare is certainly less expensive than purchasing a condominium.


Cars are not investments. They are tools allowing you to get to work, run errands, and take trips. Cars have operating expenses and depreciate in value and therefore are an expense that most of us must incur.

My advice is to always buy good used cars that you can get at a discount and then drive them for a long time. Many people get lured into buying an expensive new car, going $50,000 or $60,000 into debt. Unless you are quite wealthy, it makes no sense to spend such money on a depreciating asset, particularly one that plunges in value the moment you drive it off the lot. If that money were set aside to grow, it could multiply several times over the years and contribute to a prosperous retirement.

For more about the difference between an OPPORTUNITY and an INVESTMENT, check out my book, The Power of Persistent Planning: A Review of Successful Financial Planning Strategies, here.

Any opinions are those of Douglas Gross and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice.

*Real Estate investments can be subject to different and greater risks than more diversified investments. Declines in the value of real estate, economic conditions, property taxes, tax laws and interest rates all present potential risks to real estate investments. Investors should consider the investment objectives, risks, charges and expenses of an investment company carefully before investing. The prospectus contains this and other information and should be read carefully before investing. The prospectus is available from your investment professional or the investment company. Holding stocks for the long-term does not insure a profitable outcome. Investing in stocks always involves risk, including the possibility of losing one’s entire investment. Past performance is not indicative of future results. The information provided is for informational purposes only and is not a solicitation to buy or sell any security referred to herein.