We do not suggest any dramatic moves when diversifying your investment portfolio. It is essential to find the ideal portfolio mix that works for you and minimize your concern. Here are a few alternatives:
Savings
If you have short-term plans and expect a long pullback like a tuition fee or a big purchase, it might help you accumulate some funds. You are giving up the market returns and should be ready for the taxes on your yields. However, it is short term money, and it implies you would not have to sell big stocks at significant losses.
Cryptocurrencies
Cryptocurrencies might be at the opposite end of the risk scope from a savings account. However, that is the reason returns have been much higher. And Bitcoin and Ethereum, the largest in circulation. Though it is not transparent how crypto moves concerning stocks, it is an option worth considering when looking for a return outside of stocks.
Gold
Gold specifically has long been regarded as a way to protect wealth. However, the problem is timing. For instance, you must have seen the fluctuations in gold prices in 2010, which sat at a loss for a decade. Some industry spectators during that time favoured stock options, while others saw an opportunity to invest in gold.
Therefore, it is of utmost importance that investors analyze their goals before investing, which is where our experts can help with a no-obligation consultation.
Bonds
Bonds are the conventional investment funds against a down market because, typically, bond returns rise as stocks decline. The customary advice is to invest more in bonds as you age to prevent losing more money than you could afford. For instance, a 60-year-old hold 60 per cent in bonds and a 30-year-old 30 per cent in bonds.
However, new regulations have come in place with bond returns significantly lower than stocks for so long, and people ought to save more for longer retirements. For example, the 15/50 rule says you should hold 50 per cent at least in stocks if you expect you have 15 or more to live.
Broad Market ETFs
Diversification includes putting your hard-earned money in a wider range of stocks. You can utilize ETFs (Exchange Traded Funds) to buy real estate, gold, bonds and other asset classes apart from stocks. You may experience this as a more manageable approach than planning what to do next with an apartment building you would have to manage or a pile of gold bars.
