What Does Your Financial Portfolio Look like?
If you are like every other person, you probably have one or more of the following: 401(k), a Roth IRA, or cash in the bank. The size of your investment portfolio is a function of your earnings potential, your propensity to save, and your lifestyle choices. Does one investment portfolio match another simply because there is X amount of dollars invested in both? This question has long perplexed savers, given that it is difficult to bundle up the optimal mix of investment products in your portfolio.
Old School or New Age Portfolios – What’s Your Style?
Traditionally, a balanced mix of high growth stocks, Fortune 500 stocks, emerging market stocks, bonds, fixed-interest-bearing securities, Forex, and gold (gold ETFs, gold coins, gold stocks) make up a financial portfolio. The precise composition of a financial portfolio will vary from one investor to the next. You may prefer tech stocks, biotech, and pharmaceutical stocks, while another person may prefer industrials. The dollar value on a financial portfolio is never a good barometer of stability. The investment options will determine whether the USD value will appreciate, depreciate, or maintain its value.
As a case in point, consider the overly inflated prices of cryptocurrency products in December 2017. If you had bought into the Bitcoin boom, the balance on your account would have reflected significant gains by December 20, but the deflation would have been equally as fast. The purported bubble in Bitcoin and other cryptocurrencies was likened to the tulip mania in the 1600s in the Netherlands. This is precisely why the dollar-denominated value of a financial portfolio should never be the sole determinant of the stability of your financial holdings.
Adopting an Eclectic Approach to Investments
Perhaps the best financial portfolio is one which takes an eclectic approach to investments. Real estate, stocks, bonds, Forex, and contrarian investments provide the best possible coverage when compiling a financial portfolio. Contracts for Difference (CFDs) are one such option whereby traders speculate on price movements rather than owning the underlying asset. CFDs allow for profits to be generated whether markets are rising or falling. This is a valuable benefit of selecting contrarian investment options as opposed to the linear paradigm where assets have to appreciate before profits can be enjoyed.
Montgomery Hamish of Olsson Capital has been offering financial advice to clients for several years, ‘In my experience, the most successful traders are those who are receptive to technological innovation, new ideas, and exciting financial products. There is always a place for traditional investments, and one should never eschew them. However, it is imperative to move with the times by following economic news and updates, reading about the latest advances, and becoming familiar with tomorrow’s technology today. Gold will always be a safe-haven investment option for traders. CFDs can perform a similar function by serving as a hedge against market downturns. Traders are encouraged to consider these options since they can bolster your financial portfolio and protect you in the event of a market downturn.’