Laine Blackmon
With 2024 upon us, now is the time to reflect on your financial future. Many times, investing in one’s future leads to the typical journey of stocks, bonds, and mutual funds, which indeed are good choices for any investment portfolio. Aside from these, however, are other prudent options that allow smart investors and financial pros to enhance their portfolios amid investment opportunities. It is important to diversify your portfolio for financial wellbeing.
Here are some tips for individuals seeking alternative investment advice in 2024:
Real Estate: Investment Options are Abundant
Real estate investments can vary, and individuals should remember that real estate can be cyclical. If investors choose to invest in real estate opportunities, they need to meet with professionals and understand the nature of these kinds of investments. Multiple types of real estate investing exist. While some investors may choose office buildings as an investment vehicle, others may opt for residential housing or apartment complexes as a preferred route.
Another way to invest in real estate is to become a private real estate lender. This is where an individual or a group of individuals come together to make one loan to a developer. These loans are called “Trust Deed Investments.” These investments allow individuals or entities to act as the lender in a loan transaction. This type of real estate investing is popular because it does not require you to own/manage any real estate.
Investors’ funds (interest and principal) are usually re-paid directly to them. When your trust deed lender also services your loan there have been instances of funds diversion. But in some cases, like with NV Capital, that is not an issue for our clients as investor funds go through a title and escrow company when a loan is made, and they utilize third-party servicing companies to collect monthly payments for our private lenders. NV Capital never touches your money.
A good rule to follow in trust deed investing is to not put more than half of your investible funds into trust deed loans. The economic meltdown and bubble burst in 2007 and 2008 was a learning lesson for many. And while we hope to never experience a time like that again, investors need be savvy and maintain the 50-percent rule.
A Diversified Portfolio: The Smart Investment Move
As we have seen throughout history, the stock market can be volatile. Markets constantly shift, and there are many factors that can impact the health of the stock markets at any given moment.
While stocks can be a significant and key element of a solid investment strategy, it is also vital to ensure that investors do not solely rely upon the success of their stock holdings. Other investment vehicles, such as the bond market, mutual funds and even cash reserves, are worthy of consideration when constructing a diverse investment portfolio.
Even within investments, diversification should be considered. For example, if an individual has opted to invest funds in the stock market, it is important to consider diversifying stock holdings. Depending on the investor’s comfort level regarding risk, he or she may wish to consider investing in small cap, blue chip or foreign stocks. Regardless of the final choice, ensuring that the portfolio is diversified is critical to minimizing the risk of any given investment.
In the World of Investments, Choices Abound
Successful investors understand the importance of becoming educated on different opportunities and conducting the research. Each investor has financial objectives that are unique, and as a result, no single investment strategy is appropriate for all investors.
While an investor may not possess the deep insight of investment professionals, a smart investor is willing to commit the time and effort required to explore multiple investment options.
Even those charged with oversight of the investment industry acknowledge the importance of a diversified portfolio. According to the Financial Industry Regulatory Authority (FINRA), by diversifying your investment portfolio your “aim is to manage your risk by spreading out your investments…both within, and among, different asset classes.”
While you can’t escape all risk when embarking on investing funds, you can be proactive and perform due diligence about your potential investment. This, coupled with a well-diversified investment portfolio, can thwart some of the risk and push your financial future forward into a prosperous light, no matter if some obstacles arise.
Laine Blackmon is Reno Branch Manager of NV Capital Corporation and Mortgage Loan Originator of Blackmon Home Loans. NV Capital Corporation, LLC specializes in private lending by aggregating clients’ investment dollars together to fund loans on Nevada real estate. For more information on NV Capital Corporation, visit https://nvcapcorp.com/.
