Don't follow the crowds
When a television or radio investment commentator starts talking about the next big investment, consider doing just the opposite, says Doug Charney, senior vice president of Charney Investment Group of Wachovia Securities LLC.
"Go the opposite of what's a hot trend," Charney says.
One trend that was "definitely scary" was oil stocks, he says.
“Go the opposite of what's a hot trend”
"If oil takes a major hit, (investors) are taking a huge hit. And another one that's getting that same kind of attention is alternative energy like solar stocks," he says. "A lot of these companies don't have that good of earnings and they're performing like crazy. That's a scary trend."
In this declining housing market, Charney says, buying mortgage companies is not necessarily a bad buy despite all the negative talk surrounding such businesses.
"If you pick good mortgage companies right now, or good quality banks that don't have a lot of subprime exposure, and with some homework you can figure that out, you're going to be rewarded better than someone who's trying to hop on a trend that's already going," Charney says.
He believes when stocks and investments become a trend, "you're probably pretty late in the game, because that trend's been going for a while and you just woke up to it. ... (You) have to do a little bit more homework when you do the opposite trends, and you really have to make sure you're buying the quality company."
Look to the profit-making machines
Goodman says a strong, passive investment is buying shares of point-of-sale machines -- ATMs and vending machines.
Every time you swipe a debit or credit card, the merchant pays a fee of 25 to 50 cents to the owner of the machine. Goodman says these machines are located in high-volume locations such as supermarkets, hotels or airports. Most of these machines are leased to the retailers and the leasers do not accept individual investors. But there are some companies that offer investment opportunities for $10,000 or more for multiyear commitments.
"They give you checks every month," Goodman says. "It comes to typically about a 20 percent to 25 percent yield. You can either take the cash or reinvest and buy more machines and grow your portfolio that way.
"This is a completely passive income from your point of view as an investor. You just buy into the thing, buy as many machines as you want and the cash flow starts the next month."
Goodman also recommends investing in vending machines.
"You buy your Coke at 10 cents a can and sell it for $2," he says. "You can buy existing portfolios of vending machines. There's a whole vending machine world out there. ... It is literally a cash machine in a case."
However, according to the Federal Trade Commission, fraud is often associated with vending machine opportunities.
The FTC says fraudulent business opportunities often appear in newspaper classifieds or online ads offering big dollars for little effort. The FTC says that while these fraudulent business opportunities prey on consumers, they also harm legitimate vending machine companies.
Good companies will provide good equipment and help you set up in a high foot-traffic area like a grocery store or strip mall while a fraudulent operation will provide broken equipment and put your vending machine at a rural gas station, the FTC says.
For more information on vending machine investing, visit vending.org.