4 Ways To Diversify Your Investment Portfolio

If you want to create wealth over time, investing is great for entrepreneurs, small business owners, and even individuals seeking more income. 

However, if you’re reluctant to take unnecessary risks, consider diversifying your portfolio to spread out your assets and ensure you have something to fall back on.

The question is, how should you spread out your assets? It all depends on your personal preferences, but you can diversify your investment portfolio in many different ways to maximize your returns and guarantee a safety net.

Invest in Exchange Traded Funds and Index Funds

ETFs and index funds are excellent ways to diversify your portfolio by investing in multiple stocks and bonds through a single mutual fund. 

These funds typically track the performance of a broader market index, like the S&P 500, and include numerous company stocks or bonds, lowering your risk exposure.

The diversified exposure to a wide range of companies reduces the impact of any company’s poor performance on the overall portfolio. Both ETFs and index funds provide a simplified way of accessing a wide market segment, making them a valuable part of any diversified investment portfolio.

Buy Precious Metals

Gold, silver, and platinum are undervalued assets that can diversify your portfolio and provide a hedge against inflation. These metals tend to be resistant to inflation risks, providing a safe haven during a market downturn, and they can increase in value when currencies experience geopolitical uncertainty.

Investing in gold or silver ETFs or purchasing physical gold, silver, and platinum bars and coins from trusted dealers is more accessible now than ever.

Invest in Real Estate

Property investments are an excellent way to diversify and potentially profit. Purchasing a rental property, for example, can continuously generate income through rental payments and property value appreciation.

You can also reinvest your real estate cash flow and place it into other investments or use it to buy multiple properties. However, buyers should thoroughly analyze these investments, including researching comparable properties, rental yields, tax implications, and geographical location, to maximize returns.

Put Money Into Cryptocurrencies

Despite the volatility of cryptocurrencies, they’ve emerged as an alternative asset class that could provide room for diversification. Bitcoin, Litecoin, and Ethereum are digital currencies that work independently from central banks and credit institutions.

Cryptocurrencies offer investors a chance to diversify their portfolios by investing in an asset class that has minimal correlation with the stock market. 

Since it’s considered a nascent industry, investors should have a thorough understanding of the volatility, market complexity, and regulatory risks before investing in cryptocurrencies.

Final Thoughts

These are just a few different ways you can diversify your investment portfolio, but the truth is, this isn’t just a one-and-done deal. 

Portfolio diversification isn’t a one-time strategy; it requires continual monitoring and adjustment to optimize your investments. 

However, with the right techniques and some know-how, you can guarantee an extra steady stream of income to protect yourself financially.

A Brief Guide for Starting Your Investment Portfolio

Investing can be intimidating and overwhelming, especially for individuals just starting. However, investing is essential for building wealth, achieving financial stability, and securing a better future. 

Whether you're looking to invest in stocks, bonds, real estate, or other financial products, there are some critical things you need to know to ensure a successful investment journey. 

This blog post will discuss a brief guide for starting your investment portfolio.

Determine Your Investment Goals

Investing in an evolving market requires a methodical approach, starting with identifying your investment goals. Potential investors must consider their financial objectives before beginning to build a portfolio. 

Are they interested in short-term or long-term gains? Do they want to generate additional income or build up savings for retirement? These are all important questions to address before selecting investment products that align with individual goals and risk tolerance. 

By doing so, investors can reduce the potential of making hasty choices based on current market trends. Whether an investor is just beginning or is a veteran of the industry, identifying their financial objectives is an essential first step towards accomplishing future aspirations. 

You might even consider reaching out to a financial investment practice in order to get guidance on what you want and how best to go about it.

Choose Your Investment Products

Once you've established your investment objectives, selecting the right investment products that align with your goals is crucial. This process requires extensive research and evaluation to determine the right industry and companies to invest in. 

For example, if you're looking to invest in stocks, there are countless options, and identifying the right fit can seem daunting. Similarly, if you're pursuing investments in real estate, you'll need to research different opportunities and weigh their associated risks and returns against your objectives. 

Ultimately, investing requires a thorough understanding of the products and the markets they operate within, so, carefully research and evaluate your options to ensure you make the best decisions for your portfolio.

Create a Diversified Portfolio

Diversification is an essential strategy for any investor looking to mitigate the risks associated with investing. Focusing solely on a single company or product can be extremely perilous, especially in today's turbulent economic conditions. 

However, creating a diversified portfolio can help minimize the risks associated with investing by spreading out your risks across a range of different investment types. Investing in a mix of stocks, bonds, mutual funds, real estate, and other financial products can go a long way toward achieving balance in your investment portfolio while also reducing the potential for losses. 

By diversifying your investments, you can expect to achieve greater returns in the long run while minimizing the risks typically associated with investing in financial markets.

Invest Regularly and Consistently

Making regular and consistent investments is a pivotal factor in your investment journey. Regardless of the amount, those who invest steadily tend to outperform investors who try to time the market or make sporadic investments. 

The key is to tap into the power of compound interest, which can help your investment grow exponentially over time. Setting up an automated investment plan or scheduling periodic investments is advisable to ensure you invest regularly. 

With consistency in investment, you'll build a solid portfolio serving you well in the long run.

Monitor Your Investments and Make Adjustments

Managing your investments is a crucial part of investing and should not be overlooked. As an investor, it is essential to keep an eye on the performance of your investment portfolio. 

Regularly monitoring the market trends and staying informed about updates related to your investment products is vital to making informed investment decisions. 

It is recommended to evaluate your investments periodically and make necessary adjustments to ensure that they align with your investment objectives and risk tolerance levels. 

You can maximize your returns and mitigate potential risks by monitoring your investments and making necessary adjustments.

Final Thoughts

Investing may seem daunting initially, but it's essential to achieving long-term financial success. Starting your investment portfolio requires careful consideration and planning, from identifying your investment goals to choosing the right investment products and creating a diversified portfolio. 

Regular and consistent investments and monitoring and adjustments can help you grow your investments and achieve your financial objectives. 

With the right guidance and approach, anyone can start investing and securing a better financial future.

How to Start Investing: And What to Invest in

Investing money is a very reliable way to build wealth over a period of time. However, the whole process can seem very daunting if you’re just getting started. 

The good news is that many wealthy investors too started with a level of skepticism, but they somehow got to learn the right steps to take, implemented them, and became successful. Today, you’re going to learn the basic steps you need to take to start investing, and what to invest in, so keep reading!

Determine how much you want to invest

Many investment options today allow people to invest low or high amounts of cash. Therefore, it makes sense to begin by deciding how much you’re willing to invest before choosing your methods. Of course, the amount of money you want to invest should be informed by your investment goal.

If you are looking to secure your retirement, for instance, you should generally aim to invest between 10% and 15% of your yearly income for retirement. Ideally, regardless of your goal, you have to consider your time horizon and the amount of cash you need, and then sort of work backward to break the amount into weekly or monthly investments.

Know your options

The most important part of investing is understanding every instrument available and the level of risk it carries. Some of the most popular investment options you’ll want to consider include the following:

Stocks. These are shares of ownership in a company, and you buy them for a share price. When the company profits, you too profit.

Bonds. These are loans you give to a government entity or a company. Before the organization pays you back, you get interest.

Index funds. These are investment vehicles that track market indexes. You can use them to balance your investment portfolio.

Mutual funds. These are collections of investments that allow you to buy a diverse assortment in a single transaction instead of picking individual bonds and stocks.




As a beginner, you should look to invest in these instruments because they are profitable and generally safe.

Pick a strategy

The next thing you should do is pick an investment strategy based on your saving goals. For instance, if you’re planning on securing your retirement, and your goal is more like two decades away, you can invest most of your money in stocks. If you don’t like the process of picking specific stocks, you can go for mutual funds or index funds.

If your goal is short-term, and you need the cash within a shorter time-frame, such as five years, you can consider Bank certificates of deposit (CDs) and short-term bond funds. 

If you’re more comfortable waiting to see your money and investing long term, then a DST 1031 property investment may be a good idea.

Alternatively, you can skip this step by opening an investment account through a qualified Robo-advisor. They’ll help you build your investment portfolio and look after it.

Understand your risk tolerance

As you may already know, not all investments are successful. Every investment comes with a certain level of risk, although it’s usually correlated with returns. Before you invest, you need to find a balance between maximizing the returns and getting a comfortable risk level.

For instance, if you are willing to lean more towards forfeiting high returns to reduce risk as much as possible, you can go with bonds. 

They are very low risk, and they yield relatively low returns of around 2-3%. On the other hand, you can go with stocks to enjoy the annual returns of about 10% per year, but be ready to incur higher risk.

As you can imagine, there is a huge difference in risk within the broad categories of bonds and stocks. For instance, Treasury bonds are very low-risk investments, and they usually have low-interest rates. 

That means that the reward is low. Conversely, a high-yield bond comes with a higher risk of default. Although it’s important to keep risk at the back of your mind, you shouldn’t get over-concerned about it, according to Forbes.

The best way to approach this is using a Robo-advisor to create an investment plan that suits your financial goals and risk tolerance.

If you’ve just decided to start investing, congratulations! You’ve already completed the first step. What you need to do now is follow the next steps above to get started.

Looking Into Investment? Here are 4 Great Avenues You Might Not Have Considered

If you're interested in the investment world, you're certainly already aware of stocks and bonds as investment assets. There are, however, many other types of assets you may not have thought about yet. 

These non-traditional investments can help to diversify your portfolio and improve your overall returns. Here are four great investments you might not have thought about adding to your portfolio.

Shipping Containers

Believe it or not, many of the shipping containers that are used to transport goods around the world aren't owned by transportation companies. 

These companies instead lease them from owners, often at very generous rates. Owning and renting out shipping containers can be a great way to put your money to work, especially since they are always in demand.

Peer-to-Peer Loans

If you don't mind a higher-risk investment, peer-to-peer lending may be a good addition to your portfolio. This is a type of lending in which individuals lend money to other individuals, then collect a return on their investment in the form of interest paid on the loan. 

Interest rates on these loans vary by the creditworthiness of the borrower, but they can often range well above 10 percent. There is, however, a risk that the borrower will default. As a result, peer-to-peer loans are usually best reserved for investors with somewhat higher risk tolerance.

Wines and Spirits

Over the last several years, the collector demand for wines and spirits has gone up tremendously. Prices on limited-edition whiskies, hard-to-find wines, and other beverages have also soared, producing outsized returns for the few investors specializing in this market. 

Although it can be a tricky and volatile market to navigate, there's definitely money to be made by buying and holding certain types of alcoholic beverages.

Campgrounds

Although you may never have thought of a campground as an investment before, owning one can produce generous cash flows over time. 

To get into this market, you'll need to find a campground or RV park broker who can help you find the right piece of property. Once you acquire the property, you can begin earning a relatively passive income as campers rent out parts of it.

Even though they're far removed from the traditional stock and bond markets, these four non-traditional investments can help you realize your financial goals and build up your portfolio. 

Be sure to thoroughly research any investment before putting your money into it to ensure that you have a complete picture of the risks and rewards of your chosen asset.

5 Ways To Start Investing As A Business

Running an investment business is very different from running a traditional brick-and-mortar or even an eCommerce store. While it shares similarities, including the need for adequate capital and a thoroughly-devised plan, how you build an investment firm can be a vastly different path. 

There are multiple risk factors and ever-changing variables that an investor must be prepared for. To help you build a solid foundation for your investing business, here are five ways to get started:

Open a Brokerage Account

Today's investors are fortunate enough to be able to place buy and sell orders in real-time. Gone are the days when you'd have to call a broker on the trading floor to open a position. At the same time, you can complete said order within the day. 

This archaic form of investing left investors at risk of getting in on trade at less favorable prices. It only takes a few clicks of the mouse button with an online brokerage account to own a stock or commodity. 

When comparison shopping for broker accounts, field your candidates for commissions and other related fees, available asset classes you can buy and sell, and dashboard features, i.e., analytical tools, technical indicators, beginner courses, etcetera.

Protect Yourself Legally

It's not the most exciting part of owning and operating a business. Still, it is one of the essential facets of any commercial enterprise: a retail store or an investment portfolio. For instance, make sure you are aware of and comply with blue sky filings. 

This state-level, anti-fraud law requires security issuers to disclose the terms of their offering and any material information that could impact the underlying security value. Blue sky laws can vary by state, but these regulations are set to protect people from fraudulent investments. 

You should also understand how to file your taxes as any income sourced from securities is taxed at a different rate than your ordinary income.

Decide on Your Investment Approach

How well your investment portfolio performs hinges on your investment-selection approach. You must have sound reasoning beyond gut instinct when you invest in an asset, whether it's treasury bonds of a foreign country or a promising new tech company. 

Having a technical strategy helps weed out high-risk, low-reward assets while also allowing you to achieve more consistent and predictable results. Some investment strategies to study for beginners include value investing, growth investing, and small-cap investing.

Record Everything

Not only will it help ease the process of filing taxes every year, but having a comprehensive record of your investments can give you a clearer picture of what you're doing right and what needs improving. 

For instance, you can analyze the timestamps of each investment bought or sold in the last quarter to gauge whether or not short-term positions churned a profit or loss. You can manually record your positions in a notebook or request an account statement from your broker, which is offered at no cost. 

You can also use an online trading journal to record your positions in a blog post format. Like Babypips, websites allow you to post your trades to the public and read other investor's blog posts as well.

Consider Robo Advisors

Although robo advisors are involved in many financial planning utilities, one of its main applications is automated investing through algorithms that look for specific parameters to determine when to buy or sell an asset. Most robo advisors use mutual funds or ETFs instead of individual stocks to build your portfolio. 

In addition to robo advisors, you can also use a copy trading platform to follow and copy other more experienced investors’ trades. Any time they place a trade, your account makes the same one.

Investing as a business affords many pleasures, including minimal startup costs, flexibility in work hours, and multiple avenues to secure a profit. That said, it's also a performance-based business where growth and profitability are directly tied to how well you can analyze financial markets and how consistent you are in following your risk management measures. 

As a final piece of advice, know when to take a profit. As your portfolio grows, you'll want to lower your positions’ overall risk by systematically withdrawing money out of your account.

10 Low Risk Investments Reaping High Returns

With the rising cost of living, it’s very crucial that we put our money in something that will benefit us in the future. One way to do that is to invest our hard-earned cash in financial plans that will reap the highest returns possible. But a common misconception is that if you want to generate a higher return, you should invest in higher risk investment. But this isn’t true all the time. The following are some of the low risk investments, which have potential high return value. 

Certificates of Deposits

A certificate of deposit (CD) is a savings certificate entitling you, the payee, to receive interest. With the CD, you give your money to a financial institution for a specific length of time. In exchange for this, you get a fixed set of interest rate over a specific term period. If you choose to withdraw your funds before the term of CD terminates, you will be charged a penalty fee, which usually equals to three month’s worth of interest. 

Treasury Inflation Protected Securities

Also known as TIPS, these types of bond investments are designed to protect the investors against the negative impact of inflation. With TIPS, you’re guaranteed that you get your principal back, along with the interest rate. TIPS can be purchased directly from the government, or through banks and financial brokers. The minimum investment is $100, with $100 increments. 

US Savings Bonds

US savings bonds are one of the safest and low risk investments available, since they are backed up by the federal government. They offer a fixed rate of interest over a certain period of time, and are not subject to income taxes. There are two types of US savings bonds: the Series I and the Series EE bonds. The Series I bond works similarly with TIPS – the fixed rate is never changed, but the inflation return rate is adjusted every six months. The Series EE, on the other hand, has a fixed interest rate that is automatically added to the bond at the end of each month. 

Annuities

An annuity is a trade investment, wherein the insurance company pays you a guaranteed income at your retirement in exchange of your large sum of money. It works almost similar with CD. However in annuities, the interest rate is tax-deferred. There are many types of annuities, each of which has varying benefits and disadvantages. Talk to your financial advisor to know more about them. 

Money Market Accounts

Money market account is a type of savings account that offers competitive interest rate in exchange for a larger sum of deposits. This is a great investment option for those who want to gain higher returns. However, you may be required to maintain a certain balance to qualify for higher interest value, which is usually $1000. 

Cash Value Life Insurance

This is a type of life insurance that pays out the policy holder once a certain amount of premium has been paid to it. In addition, the amount contributed to the policy can also be used as a cash value that can be borrowed by the policy holder. In the event of death of the policy holder, the accrued value is transferred to his or her heirs, tax-free. Whole life, universal life, and variable life are all types of cash value life insurance. 

Municipal Bonds

Municipal bonds, also known as munis, are a debt security issued by a state or locality to finance its investment projects, such as schools, bridges, hospitals, and highways. The issuer of the bond receives cash from investors, like you, to fund its projects and gives it back on the agreed period of time. Municipal bonds carry interest, which is paid either in a fixed or variable rate, depending on the agreement. What makes this bond a better deal is aside from the higher interest rate, you also yield tax-free earnings. 

Preferred Stock

Preferred stock is a type of stock issued by corporations that has both equity (stock) and a debt (bond) instrument. Preferred stockholders have a larger distribution portion to company’s assets and earnings compared to common stockholders. If you want to own a share in a company, while getting dividends, then buy a preferred stock. 

Dividend Paying Stocks

Dividends are a distribution of portion of a company’s earnings to its stockholders. When you buy a share from a corporation, you are entitled to receive a dividend. If you’re looking for a way to increase your investment but worried where to put your money, then dividend paying stocks are a great choice. They are usually considered safe, especially if you choose to buy stocks from solid companies. 

Peer to Peer Lending

In P2P, instead of buying shares from a company or paying a financial institution, you lend your money to someone in the hope of gaining income. This type of investment can be a little risky, especially if don’t screen the person or company well. But with thorough screening, you can guarantee higher return value.

The truth is every type of investment is risky. But if you’re too worried that you might lose all your money in the end, then consider the medium to low risk investments mentioned above.

Michelle Mitch is a blogger who really likes to write about crocktock.com to get more information and updated.

What Retiring Later Means for Your Investment Portfolio and Your Life

English: Brocastle Manor retirement complex A new development of apartments and a retirement home on the Brocastle estate. (Photo credit: Wikipedia)

In case you're one of the rare 60-somethings who isn't close to retiring in this super awesome economy, then you've probably decided to forego retirement in lieu of another couple of years in the workforce. You're not alone. More and more people are working past 65 nowadays, deciding to push off the Golden Years for another couple of years or even decades. 

Thanks to this recession and the 2008/2009 stock market crash, many soon-to-be-retirees have lost their jobs and seen their finances in disarray. Hence, they now need to work longer just to support their lifestyle. If you're one of these people, I'm sorry to hear that. But what does postponing your retirement mean for your finances (investment portfolio) and your lifestyle? Is it all doom and gloom? The short answer is no. 

The long answer is a little more complicated than that. 

Think of this as opportunity

The Chinese word for crisis, as you might or might not know, literally translates into "danger" "opportunity". Courtesy of some 3000 year old philosopher who invented this word is a bit of wisdom. Behind every danger, there is opportunity. So instead of lamenting how the stock market crash wiped out half of your savings, think of this as your golden opportunity. 

Be glad that you are in the peak of your earning years - your paycheck could probably never be higher in this same type of economy (thanks to seniority). That means that you can plow all of your new savings into this market, and potentially buy stocks at very cheap prices! When the economy recovers, you'll make a killing! Like Warren Buffett says "buy when others are fearful". Thus, your retirement will be even better than it could have been without the opportunity to buy stocks in this poor economy. 

Now, if you've read my blog post before, you'd know that I think stocks are overpriced in the short term. But when the stock market correction does happen, that will be golden opportunity for anyone with the money to buy stocks. That's also why the rich-poor gap tends to widen. When the economy turns south, the poor are worse off than before. But the resilient will use this as an opportunity to bloom (financially) when the economy (and stock market) gets on track. 

Real Estate

Did you know that in the past year, more people joined the upper class than ever before? You're probably pretty shocked right now, because you'd think that everyone is dying and the world's coming to an end in this crappy economy. On the contrary, many of these new-found rich folks acquired their riches by investing in real estate, particularly rental real estate. 

Like I said before, this crappy economy is your golden opportunity. In your peak earning years, you have a huge advantage over youngsters - you're making more than they are, and in the right time too. Now is the best time to invest in real estate, with prices at rock bottom. 

On a side note, I'd like to share a story about investing in real estate rentals. 

The gist of the lesson is simple - go after commercial residential,  not residential. Here's why. 

A while back, I had a friend who rented a house out to these two young adults. At first, things were ok, as the couple paid the rent on time. But after a few months, things started going downhill real fast. It turns out that they did absolutely NO maintenance or cleaning on the house - it looked like a pig pen. Worse, the male was an alcoholic, meaning that there was a lot of domestic unrest and abuse going on. The couple had a child not because they loved children or had it by "accident", but because the government in their part of the country gives each family with a baby $2000 a month. 

Eventually, the government cut this funding, so the couple stopped paying, and because the law protects those who rent over the owners of the property, my friend couldn't even evict his tenants (they were getting rent for free!). What ended up happening was that there were reports of drug use in the house, the police raided the house and forced my friend's tenants to move. My friend got lucky. 

Case in point - in residential real estate law, the law protects those who rent. In commercial real estate law, the law protects the property owners. If you have A-holes for tenants - watch out. 

Stay Fit

Since you need to push back retirement now, it makes sense that you need to stay fit to live longer. There's no sense in buying a ton of stocks only to die 3 days before you retire because of a heart attack (obesity!). 

But if you think of it this way, by retiring later, you're essentially forced to stay fit (if you aren't already fit). Being fit can have a hugely positive impact on your life - you feel better, life is easier, you look better, and you live longer. When you're fit, you can do so many things that you could do before. Let's take myself as an example. Although I'm nowhere near retirement age (I'm only 27), I find that being "jacked" (as my friends like to say) has an insanely positive impact on my life - I can lift heavier things (more housework), I can enjoy more of life like extreme sports, and my girlfriend loves it :P. 

The Conclusion

So this recession isn't what we all wanted. I get that. No one wakes up and says "God, please get me fired today." But let's try to make the most of a bad situation  And you know the funny thing? A lot of times, by making the most of a bad situation we actually end up in a better situation than we would have been WITHOUT the "crisis" (danger, opportunity). 

Troy is an ex-entrepreneur and full time investor. He constantly scours the world, looking for great investment opportunities that will one day (hopefully) make him a centibillionaire  In addition, he likes to write about finance, investing, and trading (for all y'all traders out there). If you like this post, feel free to check out his blog.