An investment portfolio is a diverse group of investments that minimize the investors risk with the intent of maximizing their potential revenue. It might be composed of bonds, real estate, cryptocurrency like Bitcoin or shares in different companies. The more varied your portfolio, the less chance that you will lose the money you originally invested, and instead see an overall profit. Here’s how to develop an investment portfolio.
Consider A Mutual Fund
A mutual fund is a large gathering of money from various investors that a money manager then puts into different stocks, shares and other assets. A mutual fund provides the individual investor with access to a portion of the varied portfolio purchased by the money manager. The more investors, the smaller the overall risk to the investment fund. It allows a small investment amount from an individual to yield a very varied investment portfolio.
What About Cryptocurrency?
Cryptocurrency is a type of currency and value attributed to an encrypted string of code. It is exchanged via a public ledger known as blockchain, and can be created via something called crypto mining. It is a highly volatile investment and there’s no guarantee you’ll make a profit. Investing in new forms of crypto or those in decline for small and manageable amounts might make a profit later on. You can find out more about diversifying your investment portfolio here by purchasing cryptocurrency.
Consider Investing In Real Estate Funds
Real Estate Funds (REITs) are a great idea for those that have no experience getting involved in real estate but want to diversify your portfolio. Investment funds like DiversyFund allow the investor to invest a set amount of $500 and then join in a real estate fund with a pool of other investors. DiversyFund and other similar funds own property, and with the investment pool can go on to acquire more property in the future.
Look An Exchange Traded Fund (ETF)
An exchange traded fund can be purchased the same way individual stocks are, but actually cover a wide range of indexed-tracked investments. They can cover bonds, commodities and stocks, amongst others. They are a varied portfolio purchase that can spread risk compared to buying all of the stocks individually. ETFs are great for the new investor, as there are a huge range of investment opportunities to choose from and the expense thresholds are comparatively low.
How Do I Keep My Investment Portfolio Diverse
A combination of ETFs, mutual funds, real estate investments and even cryptocurrency will keep your portfolio varied and minimize risk. But be sure to regularly review your entire investment portfolio regularly. Look at which investments among your portfolio have performed really well, and which are performing poorly. You should also examine how you feel about risk – can you invest more? You should always be confident you can still pay your bills each month before you invest more money.