It’s a curious time in the financial markets. What about the domain market?
It’s hard to believe that the greatest stock market crash and economic recession of our generation is now a decade old. Since then, at least as far as the stock market is concerned, it’s been nowhere but up. There have been some blips, such as this week, that serve as a reminder. But those have usually been followed by a continued march upward.
It can be easy to become complacent in such environments. I personally like to keep cash on the sidelines to buy into opportunities when the market dips–whether that’s for stocks or domain names. Unfortunately, you can’t time these things. I ended up keeping way to much cash on the sidelines over the past five years as the market soared.
That said, some of the best domain investments I made were when people were hungry for cash during the great recession.
Although the domainer-to-domainer market is a bit soft right now, it seems like some of the valuations people are putting on domains in the expiry stream are rather frothy. The prices don’t seem sustainable when you consider the typical domain investment practice of selling 1%-2% of a portfolio per year. That doesn’t work if you buy at prices that you can only get a 5x return on when the domains finally sell.
I’m continuing to hold cash on the sidelines for the true buying opportunities. But my conservative approach is probably why I don’t drive a Bugatti.
Keith says
Great post Andrew. I hit on this same topic in a post a while back so I’m going to plug it here 🙂 https://dngeek.com/2018/09/how-to-make-money-if-the-domain-market-crashes/
Andrew Allemann says
That’s a great post – thanks for sharing.
Taylor says
Not happening, there is just to much money floating out there from emerging markets you never used to see on whois prior to 2011 as much.
Shane Cultra says
Trying to time anything is a terrible idea. Banking profits, diversifying investments, and keeping a cash reserve for good deals is definitely a sound part of investments but this really comes down to do you believe in your investments long term. If you do then you continually reinvest your profits on a schedule or regular basis. You most likely will have purchased some at a great price and some not as good. But at the end the overall investment should be worth more than what you put in with certain investments contributing more than others. In, short, you make money by having it work for you. Cash in the bank short term may be waiting for an opportunity for a good deal but if it stays long term it becomes a savings account.
Steve Johnson says
I own Lancaster.net, Shaman.org, Taoweb.com and DaMusic.Biz. Is this a good time to sell them?
Snoopy says
10 years ago.