Property investing advice and what to believe – How to judge a book or article

property-investing-judging-articlesI regularly read articles about investing as well as the general state of the economy. It seems that there are as many opinions as experts, and just about any train of thought will have an expert to back it up. With this in mind, it’s worth considering how to sort out the good articles from the ones that are just plain ugly. And here’s how.

There are a few questions you should always ask yourself when reading an article, regardless what the article says:

  • Who is writing the article? Do they identify themselves (or do they stay anonymous) and are they an expert in their field?
  • What is the purpose of the article? Is this person commenting because they feel passionate about an issue, or is there possibly another motive? Does the author stand to gain from you believing him, or following his call to action?
  • What sources are quoted and how reliable are they?

1.   Does the Author identify themselves?

Authors who remain anonymous must be considered with a high degree of suspicion. If they’re not even going to put their name to their work, why would you believe what they say?

If you do know who wrote an article that you are particularly interested in, google-search the author to see what you find. Sometimes you’ll find a rich history of education, good advice and happy followers. Sometimes you’ll find nothing but the author’s name followed by some kind of scam. Your search should give you a fair idea about the author!

Even with the search done, it’s still worth keeping in mind that:

  • Not everything you read on the internet is true (and this could refer to the article or to any scam claims).
  • Even people with a chequered past may have valid ideas that are worth listening to.

2.  Where is the article written and for what purpose?

property-investing-informationIt’s then worth checking out the purpose of the article and the website hosting the article. Does the website promote a product that the author would want you to buy? Classic examples include websites that suggest property values in a certain area are set to boom, which “conveniently” offer great buys in that same area, or a website that promotes share trading and happens to have a “property investing is doomed” article on it.

Most people, especially beginner investors, feel that there are two options to ‘real’ investing; either you invest in property or invest in shares. It follows that someone who is interested in selling a product to beginner investors would then do one (or both) of two things:

  • Sell how beneficial your kind of investing is, or
  • Trash the other investing style

Now, almost every investor knows that neither shares nor property have been doing particularly well lately. Therefore, in 2012, it’s pretty hard to sell the benefits of short-term ‘how to become a millionaire overnight’ investing for either shares or property. Nowdays any promoter wishing to push a product has only one remaining option – trash the other investing style.

3.  Are the sources of information provided?

Finally, check the sources quoted in the article, and if you have the time, check out the actual sources that are quoted. I’ve seen articles mis-quoted magnificently (or taken completely out of context) to suit an author’s purpose. Newspapers are often quoted, but be careful here – just because an article is in the print media does not make it gospel, and there are plenty of editorials and other articles that I read in newspapers which arouse more than a healthy scepticism in me.

While on this point, I must confess that I do find a good graph quite compelling. Pictures and graphs seem to have the same impact on many of us! Whenever you come across a great image, check out the source and see if you can verify the information independently. A lot of research organisations copyright their own published graphs, so many you see are made by the author and quote figures from elsewhere. Check them out. Can you verify them? If not, then the graph is nothing but a pretty, but irrelevant, picture.

A guide to rating an article

Why not use this simple guide to rate an article out of 10?  Simply select one option from each section that best describes the article:

Part 1 – The Author
The author is a well-recognised authority in this field and I do not see any significant references to this author being involved in scams or bad business practices 3 points
The author is someone who I may have heard of, or maybe they’re new, but their google search stacks up well 2 points
The author was unknown to me and when I checked them out on google I found a very compelling case for them being a con-man OR the author is anonymous 0 points
Part 2 – The Website
The website is an independent news source, or place where I would expect to find balanced articles 3 points
The website is very clear with its motives and the call to action (if there is one in the article) is not related to these motives OR the website is clear with its motives and there is no call to action 2 points
The website has a clear motive that is related to the call to action 1 point
The material is clearly advertising 0 points
Part 3 – Sources of Information
The information I checked out was all valid and is from a reliable source 4 points
The information I checked out is valid but not all of the sources are reliable, or some of the sources do not show their data 3 points
The information I checked out is mostly good but some may have been taken out of context 2 points
Some of the information I checked out is correct but a lot of it seemed somewhat different to what was quoted in the article 1 point
There were no sources shown OR The information I checked out was generally taken out of context or changed to suit the author’s purpose 0 points

 

Generally, if I read an article that doesn’t score at least 6 points, I won’t pay much attention to it.


property investing

Right now, both Kaz and I agree that we are in part of a property cycle that has seen values soften. We don’t know how long it will last and we don’t know how deep it will go. What we do know is that the property market has always been cyclical – history tells us that it’s bound to recover sometime.

Kaz and I are still investing in property. We have our money where our mouth is! We believe that the fundamentals are still in place for real estate to make a good recovery and to supply us with a consistent income. Do your experts do the same? Where are they investing? Maybe that’s the ultimate test!

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