Is Investing in Google Adwords A Better Play than U.S. Stocks?

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By Jacob Maslow

Close up of Google's Advertising Program
Close up of Google’s Advertising Program’s website on a computer screen.

Thanks to the sky-high valuations made possible by all the free money pumped by central bank stimulus schemes in equities markets. Because of this, it has been relatively easy to make money off stocks. The problem is that the market is already saturated. Even the riskier stocks out there are already over-subscribed. It appears that all that cheap liquidity has been fully placed. The best bets are already taken. The worst bets are even showing signs of saturation.

To make matters worse, the whole market is under a lot of pressure. There are a lot of hedge funds and institutional investors out there that are pushing hard for returns. It doesn’t matter where it comes from. It doesn’t matter what they need to do and however long it takes. They need to get a return within a certain period. This is a lot of potentially damaging pressure facing the market.

Not surprisingly, investors are looking for creative ways to get their target returns. We are talking about returns upward of 8% to 16%. Here is a hint. If you are looking for those kinds of returns and you want to do it in a fairly safe and controlled environment, don’t look at equities markets. Instead, look at Google’s Adwords system.

The Adwords system is a pay-per-click advertising system where advertisers pick certain keywords that would trigger their ads. When Google (NASDAQ:GOOG) users enter those selected keywords into their search boxes, the advertiser’s ads show up. When these same users click on the ad that showed up, the advertisers have to pay Google.

How does this end up putting money in your pockets? Well, if you select the right keywords and you show the right ads that convert enough viewers, you have a chance of turning every penny you spend on Adwords into possibly $0.50 or $1. The returns can be quite astronomical, depending on the niche you are targeting. Based on a numerical perspective only, this makes for a better statistical play than playing stocks.

In terms of control, there is actually a lot of control built in. You obviously control the keywords you select. You control the ads that will appear, and you control the landing page the viewer lands on. There are a lot of opportunities to do a highly intensive research to filter out keywords that have mixed intent. In other words, people who enter these keywords are interested in buying. You can focus on keywords that can be massaged, manipulated, and pushed to produce the buying behavior you are looking for.

Put altogether, with a little bit of elbow grease, a little bit of patience, and a smaller amount of capital, it is probably easier for investors to get their target level of returns playing Google Adwords rather than the equities game. The reality with the equities market is that the places where you can invest your funds to get a decent return are getting fewer and fewer.

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