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Even if you do not find yourself facing retirement age right now, this is a good time to take a look at your investments and how you can increase your returns and protect your gains through portfolio diversification.
The vast majority of people have their retirement savings in IRA or 401(k) accounts, with a heavy emphasis on either individual stocks or mutual funds. When you speak to the many investment advisors looking for your business today, their instructions to diversify normally apply to buying stocks in different industry groups and different stocks in each. This is good, but if the stock market is the only place you have your money, more diversification can be better in the long run, especially if you are younger and have an appetite for controlled risk.
Real Estate
Real estate responds differently to inflation and interest rate fluctuations than the stock market as a whole. Inflation is the increase in costs of labor and materials or goods. The rental property investor holding homes long-term can be helped by inflation, as the increase in labor and material costs normally bring higher home prices, so too do the rental homes gain value.
Interest rate increases only bother the rental home investor if they’re buying, not when they’re holding homes in inventory. They have mortgages on those at fixed interest rates.
Precious Metals
Since the first gold was crafted into jewelry, gold and silver have been prized by humans around the world. These metals also respond differently than stocks to inflation and interest rates, and they often gain value when markets are in trouble due to global unrest or political issues.
Moving some of your money from stocks to both real estate and metals can help you to weather market gyrations and protect your assets over the long haul. Of course, there is a lot to learn before jumping into these asset classes, but over time it can be a very smart investment strategy.
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Shutterstock
Even if you do not find yourself facing retirement age right now, this is a good time to take a look at your investments and how you can increase your returns and protect your gains through portfolio diversification.
The vast majority of people have their retirement savings in IRA or 401(k) accounts, with a heavy emphasis on either individual stocks or mutual funds. When you speak to the many investment advisors looking for your business today, their instructions to diversify normally apply to buying stocks in different industry groups and different stocks in each. This is good, but if the stock market is the only place you have your money, more diversification can be better in the long run, especially if you are younger and have an appetite for controlled risk.
Real Estate
Real estate responds differently to inflation and interest rate fluctuations than the stock market as a whole. Inflation is the increase in costs of labor and materials or goods. The rental property investor holding homes long-term can be helped by inflation, as the increase in labor and material costs normally bring higher home prices, so too do the rental homes gain value.
Interest rate increases only bother the rental home investor if they’re buying, not when they’re holding homes in inventory. They have mortgages on those at fixed interest rates.
Precious Metals
Since the first gold was crafted into jewelry, gold and silver have been prized by humans around the world. These metals also respond differently than stocks to inflation and interest rates, and they often gain value when markets are in trouble due to global unrest or political issues.
Moving some of your money from stocks to both real estate and metals can help you to weather market gyrations and protect your assets over the long haul. Of course, there is a lot to learn before jumping into these asset classes, but over time it can be a very smart investment strategy.
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