IMPORTANT: If you're looking for specific advice on picking domains that are going to make your fortune, you won't find it on this site. This is an information resource, not an investment advisory service. With that out of the way, let's proceed...

An essential adjunct to this investment guide is the article "A Long Hard Look at Domain Name Valuations", which paints a grimly realistic picture of the diminished market for domain names, and the changing playing field that domain name owners find themselves facing compared even to just a couple of years ago. If you haven't read the article yet, please do so now (the link above will open in a new window, for your convenience...)

If you're considering purchasing domain names for investment (either in the form of new registrations, or on the secondary resale market), it's important to focus on how you're actually going to make money from your portfolio of domains.

Without a clear up-front vision of the "path to liquidity" for your domain investments, it's better to stay out of the investment side of the business entirely.

Remember, a domain name that is gathering virtual dust (i.e. that's not generating traffic or sales inquiries) is worth nothing at all - in fact, it has a negative worth since you'll be required to pay a renewal fee every year to maintain the registration (and hence control over the domain.)

On the other hand, if you can find ways to generate revenue from a domain name even while you're waiting to unlock much greater value from it through a sales or leasing transaction, you're in a much stronger position. As long as a domain name pays for its own upkeep over the course of a year, there's nothing (in theory) to stop you holding on to it indefinitely.

When considering purchasing domain names for investment (whether new registrations or purchases made in the secondary market), it's important to focus on how you're actually going to make money from your portfolio of domains.

We're getting a little ahead of ourselves here, since we first need to understand some of the other main risks inherent in domain name investments. To this end, the next section, "Similarities and differences between stocks and domains" looks at how stocks and domains are traded, and what parallels can be drawn between the mechanisms of the stock market and the domain name resale industry.

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