There are multiple forms of investing available to the public. In my science experiment, I will be comparing several different investments and gathering information on each of them to come to a conclusion of which one is more profitable in certain time frames. The three different types of investments I will be comparing are stocks, real estate, and investment in fine arts. To gather information and study stocks, I will first download a stock application on my phone.
I will be able to use the application to to experiment investing in different companies on my own using fake currency. Aside from using this application, I will also be giving myself a set amount of money which also is fake currency, and invest in both stocks and real estate to get the most accurate conclusion as possible. Now that I have come up with a way to gather data about my stock research, I also have to find a way to look at real estate prices both locally and in major cities like Los Angeles and New York.
The way I will be doing so is by looking at which forms of real estate investment have been most profitable over the past ten years. I will be looking at industrial, office, retail, and apartment real estate and conclude which is more profitable or safe to invest in. Aside from real estate and stock investments, I will also be studying investing in fine arts. I will study the different average price points that fine art is sold for both in long and short periods of time.
Once I have analyzed and gathered enough information about investing in fine arts, I will compare the results to those of stocks and real estate to further develop my conclusion. After doing some research over a few days I have managed to gather some new information on not only just different types of stocks but also on different strategies that are used throughout the stock market. First of all, the stock market is an online trading business where people can purchase shares of companies both large and small. These companies are split up into shares which is what people are given the option of purchasing. Assuming I were to purchase 1,500 dollars worth of shares of a company and that company starts to do really well, than their price per share increases and I may be able to sell those shares for 1,800 dollars making a 300 dollar profit which I can then reinvest in another company. Having said this, if I invest that newly earned 1,800 dollars into shares of a totally knew business and after some time that business begins to fail, than I may have to sell the shares for 1,400 dollars to avoid losing even more money. The stock market is extremely complex but this is the easiest and most simple way I can describe how it is used and functions.
The two different types of stock investments I will be focusing on studying are penny stocks which consist of small companies, often startups, and larger stocks which consist of big companies and corporations such as Google and Apple. Penny stocks are purchased at small amounts of money that can range anywhere from 5-100 dollars per share, and above depending on how many shares one may want to purchase. Larger stocks however can range from 1,000 dollars per share and above also depending on how many shares the buyer purchases.
Penny stocks are a much more affordable way of stock investment for people with a small investment budget however larger stocks are for a smaller amount of buyers that can afford to have a much larger budget. Both of them are virtually very similar, but profits in larger stock investment are larger than in penny stocks but you do run the risk of also having much larger losses than in penny stocks. Investors in penny stocks generally are looking for a ‘quick flip’ by purchasing a stock when it is at a low price and immediately selling it when it spikes up. Investors in the larger stocks however purchase shares of companies whenever they are lucky and one is at a low price and then they hold onto it for much longer than someone with penny stocks would because when they are investing even tens of thousands of dollars, they must wait for the perfect moment to sell their shares so that they actually get a return on their investment. Penny stocks are a much more short term investment than larger stocks which can be held by a seller for months or even years unlike a penny stocks investor who usually holds stocks their stocks for a few days or weeks and few times months.
Real Estate is a form of investment that is very expensive to get into but the return is many times much larger than in stocks. I will be studying residential Real Estate in both Los Angeles and in New York. These cities are very expensive to live in but also have some of the most profitable Real Estate options available. Real Estate prices in Los Angeles and in New York are some of the highest in the world. The average price of a home in Los Angeles is about 633,000 dollars and the average price of a home in New York is 690,000 dollars. However the more expensive areas of these cities are more than triple these prices. An average home in Beverly Hills, CA can range anywhere from 3 million dollars for a small home to tens of millions for mansions. The average price of a 1,000ft2 condominium in Manhattan, NY can range from 1-3 million dollars while some larger condos around 4,250ft2 can go for 14 million dollars.
It is evident that this Real Estate is not affordable for the average person but these prices can give you a visual of how much profit people that previously owned all this property have either already made or have in liquid assets. As far as investment in such real estate goes, you could only make these immense amounts of profit if you have a lot of money to begin with. The cost for investing in this real estate in either cities is huge, but the return in just a few years can be very rewarding. This last form of investment is only for people that have a lot of money in their pockets. Investment in Investment in fine arts is a very prestigious and costly form of investment. There is some affordable art that can be sold for you to make a profit off of but it will run you a few thousands of dollars. However, investment in fine arts can cost tens, even hundreds of millions of dollars. It is not at all practical for the average person in any way but I am discussing it just to give a better understanding of the abilities and advantages to such investment.
The most common fine arts that are invested in are paintings, classical instruments, and sculptures. These items can range anywhere from 250 thousand dollars, up to 100 million and sometimes more. These precious items are not only expensive because of their physical value but mostly for their historic and creative value. Despite their extreme price points, fine arts are the most reliable type of investment on the market. They almost never decrease in value and if they do not increase in value which is rare, than they are guaranteed to maintain it. This is probably the most profitable form of investment out of these three options however it has an extreme price tag. To give a quick overview of my gathered research so far, the best short-term investment based of of current information is penny stocks or even fine arts. The best long-term investments on the other hand are large stocks, real estate, and again fine arts.
Clearly, the most affordable and convenient form of investment for anyone looking to get started, is penny stocks. The advantage to starting with penny stocks is as you build up a larger amount of money, one can then move to larger stocks and then real estate and fine art. Therefore, I would say that all these forms of investment can be very profitable and rewarding, but a great foundation and safe investment is penny stocks.