The old saying goes that you must split your eggs between different baskets when it comes to investing. In other words, don’t put all your money into one project. If this project takes a turn for the worst, you have nothing left. On the other hand, if you split your risk, poor performance in one area doesn’t matter because all the other investments make up for it.
Here are some top tips for diversifying your investment portfolio with smart investments!
Sometimes referred to as stocks or equities, shares are parts of a business. If you buy a share in a business, you own one tiny part of the company. As a result, you’ll earn dividends on this share and have a say at annual general meetings. Naturally, you’ll need to find growing companies in Australia. If you buy shares while the company is small, you’ll benefit as the company grows and your shares increase in value.
Of course, the risk is that the business shrinks and your shares are worthless in two years than they were at the beginning. To get started, consider contacting a financial adviser with experience in this area.
If you’re looking for more active investments, why not search for a gym for sale in Melbourne or another city? If you have experience in the fitness field or know somebody that could help, you could open your own Ninja Parc gym or another franchise. Rather than doing everything yourself, you’ll get lots of help as a business owner in this field. If you choose the right location, there’s no reason why you can’t enjoy some success with a gym franchise.
What’s more, you could hire a professional fitness trainer and treat it like passive income, if this is what you prefer.
This might sound archaic, but there’s still value to adding some gold to your investment portfolio. The difference between gold and other investments is that its rarity rather than the economy sets the price of gold. With most investments in your portfolio, a crash in the economy causes a huge loss of value. On the other hand, gold isn’t affected by the economy and always retains its value. As a rare commodity, the market has its own value, and you can protect a percentage of your wealth with this investment.
As well as buying physical gold bars, you can also invest in the following:
- Gold receipts
- Gold mining stocks
- Gold ETFs
Not everybody has time to carefully manage their investment portfolios, and this is why managed funds exist. If you haven’t seen this option before, you pool your money with other investors, and a fund manager decides where to invest it. While some managed funds focus on one single asset class (such as shares), others diversify across property, cash, shares, and others.
Finally, why not consider investing in a rental property to make some passive income this year? Buy a property, prepare it for lease, and find a tenant. Like all investments in this list, rental properties have their risks. If you don’t have experience in this field, it might be wise to contact a property manager or somebody that has managed rental properties before; the last thing you need is to make a fatal mistake.
If you want to diversify your portfolio, first think about your skills and whether you can utilise them effectively. If not, use fund managers and other professionals to handle your money on your behalf. Why not diversify your investment portfolio today?