Working with so many individual business owners, it’s easy to gain a respect for their ability to have a vision and execute on opportunities. At Capstone, what we aim to do is help these business owners and entrepreneurs carry over their knowledge and acumen into investing in other areas.

In a recent article titled Investing Versus Flipping, author Chris Brightman of Research Affiliates does a great job of bridging the knowledge and experience that business owners have and applying it to investing in stocks and bonds. Additionally, he identifies the key to investing in any opportunity, whether it be companies, real estate or stocks and bonds, with the premise being “short-term price volatility as opportunity; high price as risk.”

Specifically, the example provided describes the difference between investing in real estate in Orange Country, California versus Atlanta, Georgia. Brightman exclaims:

“I am buying cheap houses in Atlanta with long-term expected after-tax returns of 5%. These home investments seem safe to me. Comparable houses in the OC are far more expensive. I estimate long-term after-tax returns of only 1% for investing in houses in Orange County. I judge these high housing prices as creating risk to achieving my return goal for retirement.”

Aim High, Buy Low – The Advantage of Investing in Emerging Markets

This same example can be applied to different opportunities in stocks as well. Today’s high-priced U.S. stock market provides quite a bit of risk. However, emerging markets like Brazil, Malaysia and China sell at lower prices and are harbingers of higher returns.

Take some time to enjoy Brightman’s article, and transpose your skills as a business owners to investing opportunities for maximum growth.