Investing money is not limited to just stocks, bonds, and mutual funds. In fact, if you tie all of your investing to Wall Street, you could be in trouble when the market goes on a real bear run.
The successful investor knows that diversification goes beyond having a diverse portfolio of stocks, or having a mix of stocks and bonds, or even having a diversified mutual fund with stocks and bonds of all different sorts. To be diversified when investing money, you need to move beyond Wall Street and consider Main Street.
Have You Considered Investing Money in Real Estate?
People began heavily investing in real estate right after the dot-com bubble burst, and this caused home values to go through the roof. However, the housing market has been cooling recently, and home prices are on the decline.
If the trend continues, a savvy investor would wait a few more months and then begin investing in real estate! After all, the popular saying in real estate is, “you don’t make your money when you sell, you make your money when you buy” – and you do this by investing money when home values are down.
If fixing toilets and dealing with tenants isn’t for you, consider investing in real estate investment trusts (REITs). REITs trade on major exchanges, right alongside stocks, but this doesn’t make them equally susceptible to market crashes.
In 2002, while the Dow Jones Industrial Average plummeted, smart investors were investing money in REITs – and they made a killing. One reason is that REITs have what Wall Street insiders call “downside protection,” meaning that they can only go so low.
The reason is that REITs have to distribute 90 percent of their investment income back to shareholders. When you buy REITs, you’re buying a fat monthly check – almost like rent, but without the toilets and tenants.
How About Investing Money in a Small Business?
Another way of diversifying your holdings is investing in a small business. You can either start a company yourself, or look for a young, entrepreneurial firm to invest in.
The best thing about investing in small businesses is that their success isn’t tied to Wall Street. Take a big company like Costco, for example. Its sales and profits grew every year during the bear market of 2012 through 2016, and yet its stock price plummeted.
But what if you owned a piece of a small business with sales and profits that went up each year? You wouldn’t have to worry about Wall Street’s fickleness.
When the market is in a downtrend, investing money in venture capital can be a great idea. Companies looking for venture capital are small businesses with big dreams. They eventually want to take their businesses public through a Wall Street IPO (initial pubic offering).
By investing in companies like these during a bear market, you’re likely to get a better deal. However, most businesses looking for venture capital funding require relatively large investments, so this tactic is best for more affluent investors.
A Final Tip for Investing Money – Beat the Bank!
Investing is all about making a profit for yourself, but what if you could help others in the process? If this sounds appealing to you, consider investing money through Prosper.com loans.
Prosper.com allows you to beat the bank by being the bank. You can evaluate prospective borrowers, set the interest rates they’ll pay, and loan amounts as low as $50. Monthly payments are then taken from their checking accounts and deposited into yours.
You win because by investing money with Prosper, you get a higher return then you would expect from a savings account, and borrowers win because they get a lower interest rate than they would from a bank. Thus, investing through Prosper.com is a win-win situation.
The Best Financial Advice Leeds.
Financial advice plays an important role in securing the future as well as proper management of finances. There are many service providers in Leeds but to get the very best of results from your investments and pension, you will need to ensure that you are settling for the best organization with the best financial advisors that you could need. By taking a few things into consideration, you will easily manage to get the best advice for your financial situation.
The qualification of the financial organization that you settle for is paramount in fetching you the desired results. This means that the firm you settle for needs to have professionals who have the training needed in offering the best financial solutions. The same should be the case when choosing an independent advisor for your finances. It is the academic qualification and knowledge that will determine the kind of results he or she will get you.
Apart from being qualified, the experience in financial advising should also be considered when looking for the best financial advice. With years of experience in dealing with financial matters and in their different kinds, your advisor will find it easy to handle your situation no matter how complex you might feel it is. He will manage to analyze the situation at hand and also create strategies bound to work to your advantage increasing returns and reducing risks.
Financial advice in Leeds comes with a price. It makes it important to consider the service charge before choosing the best professional or company to handle your advisory needs for you. It is possible to still enjoy high-quality services at a fee that you can manage comfortably. Of course in many situations, the financial advice is on a long-term basis, but the advisors will always have a plan that you can work with. Financial management needs to be continuous, and you will, therefore, need regular updating and checks from your advisor. It is important to strike a long-term working relationship.
The financial advisor you settle for in Leeds should not only give you the advice that you need but should also come up with the best solutions depending on the situation that you have at hand. A workable strategy needs to be created to improve the current situations thereby also improving the behavior of your finances. It is always worth working with the best people for the job in Leeds so be sure to make the right selection.