Did you know that almost half of Americans aren’t investing their money?
The financial industry is huge and often unpredictable. It’s understandable why so many people don’t trust their abilities to create a profit. The truth is anyone can thrive while investing as long as they take the time to diversify.
So what can you do to build a diversified investment portfolio? Keep reading for the ultimate guide that will make this process easy.
Keep Things Simple With ETFs or Mutual Funds
One of the easiest ways you can expand your reach is to invest in ETFs or mutual funds. These investment opportunities allow you to park your money in one place that combines a wide array of different companies.
For example, if you invest with Vanguard, you can purchase their VTSAX mutual fund, which lets you have a slice of the pie from the entire U.S. stock market.
Never Underestimate the Value of Real Estate Market
As outlined by the experts at memphisinvestmentproperties.net, real estate investments are always a solid choice. Buying a home for yourself is a great place to start because the money you’d normally throw away for rent is now building in value over the years.
You also can explore other options like buying properties to rent to reliable tenants.
Choose Stocks From Various Industries and Company Sizes
From healthcare to technology and entertainment, there are plenty of industries that can have highs and lows over the years. By spreading your wealth, you can ensure that your overall investment will succeed even when some industries have a bad season.
You should also pay attention to the size of each company you invest in. Larger businesses tend to be more reliable while smaller businesses with lots of potential can give you impressive returns.
Have Peace of Mind With Low-Risk Bonds
While every experienced investor will recommend various amounts, the average young adult should have around 30% of their total investment in bonds. Bonds are a secure investment with guaranteed returns, which can give you some security to balance out riskier pursuits.
As you age, you can start shifting more of your investments into bond territory to reduce the volatility of your portfolio.
Smart Investors Look Abroad Too
The American economy is a force to be reckoned with, but that doesn’t mean there aren’t incredible investment opportunities elsewhere. When you purchase international stocks, you can give yourself protection whenever the American economy suffers from dips.
Now You Know How to Build a Strong Investment Portfolio
If you’re new to investing, figuring out how to create a diversified investment portfolio can feel overwhelming. By following this guide, you can navigate this challenge with confidence.
Do you want to know other ways you can become an expert at financial management? If so, our site has all the information you need to make your money work harder for you. Click through our blog so you can access more brilliant guides.