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More Speculation, More Risk – Why You Should Be Careful Of Investing In New Domain Extensions

Posted On Tuesday, March 26, 2013

This domain entry isn’t geared at established domain investors. I am writing this to detour a few of the new investors from making one of the biggest mistakes they could possibly make by increasing risk in what already is one of the most speculative investments available. It’s a fact that the majority of the new extensions will not catch on. The relaunch of the .pw ccTLD is a perfect example. There is little to no investment value in the (private web).

With that said it is important to be extremely picky about where you place your money. Why burn through cash, which could be saved to buy a great domain in an already established extension. An extension, which has a proven track record when it comes down to returning profits for those that have chosen to invest in it. Yes, I am talking about the .com extension. If you are wondering why you are not making the type of returns you would like or wondering how to get started in domain investing with a small budget, then the .com extension is for you.

Don’t let the glitz of a shiny new extension blind you from the real opportunities. The real opportunities to make money in this game are in the .com arena. If you aren’t ready to pay to play, then you might need to rethink your strategy. The best domains are going to take time to find and money to buy. The good thing is these opportunities are still out there. The “domaining industry” is similar to the stock market, because it tends to run in cycles. There will always be those that are liquidating domains to float themselves through tough times and those that are buying names when everyone else is doing the opposite.

The key is to make sure your money is invested in the right assets. Just like you wouldn’t invest in every name out there, you shouldn’t be investing in every extension out there. Not every extension is going to work for an end-user. In the end you should always be thinking about who your prospective buyer might be. If an end-user can’t identify with a particular domain extension, then why would you buy into that extension as a domain investor?

Doing such a thing will equip you for failure. As a new domain investor it is important to give yourself a chance. You are up against some of the fiercest competition out there. Everyone wants names which they can liquidate fast or hold onto for increased investment value. In the end it is all about making money. Don’t buy into the hype, buy into something which has proven itself time and time again. If I were just entering this space, the first thing I would do is hop onto some of the major aftermarket sites and study the type of names which are dropping and the names which investors are buying off of the drops.

It is all about patterns and trends. The trends which tend to repeat themselves are that of premium domain names. The one pattern that you will notice about premium domains are the mere fact that they increase in value over time. You can also count on the fact that more people identify with premium (.com) names then any other type of domain investment out there. To sum it up, if you speculate more, you are increasing your risk and if you are new to domain investing you would to decrease speculation and invest in a proven extension.

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