When you get into investing, you hear the same thing all the time; "You need to diversify your portfolio", "Don't put all your eggs in one basket", etc. While it's good advice, it doesn't really tell you what you need to do. Sure, you can invest in the S&P 500 and that will spread your investment across 500 different companies, which is great. However, more than a quarter of the S&P 500 is in technology. That doesn't exactly seem diverse. So, let's look at some alternative investments that can help you improve that diversity.
Buying Real Estate to Diversify for Portfolio
One way you can expand your portfolio is by investing in Real Estate. And it can be as easy as buying a stock on the stock exchange. A REIT is a type of stock for a company that manages real estate, so by owning part of the company you're investing in real estate. However, one problem with REITs is that you have no say over what real estate is built or managed.
Another option is companies like Fund That Flip or Fundrise. Companies like these can give people access to projects that were previously only available to multi-millionaires. Through Fund That Flip, you can invest in real estate projects and earn up to 9% return on your investment. And you're even protected on the downside in case the project fails, because each project is backed by a mortgage. The only downside is that you must invest at least $5,000.
Exchange Traded Funds (ETFs)
Another popular commodity that anyone can purchase these days are ETFs. And many can be purchased on major stock exchanges. An ETF is a collection of securities, like stocks, that are tracked by an index. For example, a major ETF, SPY, tracks the S&P 500, so if companies in the S&P 500 do well, so will SPY. You can even see a list of their stock holdings.
A major benefit of ETFs is that there are ETFs for everything, like the S&P 500, foreign markets, or even the entire market. There's even ETFs that focus on socially responsible investments, so that you can feel better about where your money is going. Owning a share of an ETF is like owning a slice of many different securities. Just make sure you look into the fund to see what it is tracking and do research before making a decision.
Invest in Defynance
There's actually two ways to invest. For accredited investors, you can invest in our ISA Credit Fund, which will allow you to invest directly in income share agreements. With this being a new and exciting asset class, you'll be sure to diversify your portfolio and lower your risk. With our product, you can earn high returns with low volatility due to unlocking income as an asset. Investing in the ISA Credit Fund also comes with tax deferral benefits, since any gains are not realized until after you recoup your initial investment.
But wait, isn't Defynance a technology company too? Well you got me there. However, investing in a growing company, and in our case, a startup, can add diversity to a portfolio of mature companies too. On Defynance, you can find more about our company offering and make an informed decision. Or you can also invest in us because you believe in us and what we do!
*Our content is intended to be used and must be used for informational purposes only. It is important to do your own analysis before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on our Website and wish to rely upon, whether for the purpose of making an investment decision or otherwise.
