In the wake of a volatile year, many investors wonder what assets to add to their portfolio in 2023. While stocks, bonds, crypto, and real estate have all taken a hit this year, commodities offer an exciting investment opportunity that’s often overlooked.
Stocks are the most liquid asset and the best way to grow your money. They can be bought and sold easily on a secondary market, as you can buy or sell them anytime without waiting for an exchange to open.
When buying stocks in a company, you are buying shares of ownership. As long as the company is still around and operating well enough to continue paying its shareholders dividends, you’ll continue earning money from your investment.
However, not everyone should invest in stocks, especially if they’re starting with their finances or don’t have much money.
Bonds are a way to invest in the future of a company or country. They can be used to diversify your portfolio, hedge against inflation, and provide income.
Bonds can help you diversify your portfolio if you have too much of one type of asset, like stocks or real estate. In addition, you can use bonds to balance out your risk by investing in different types of companies with varying degrees of risk and return potential.
For example, bonds don’t fluctuate as much over time compared with other assets, such as stocks or real estate properties that change hands frequently.
Crypto is the most volatile asset class in the world. You can use it to invest in real estate. Cryptocurrencies are not always safe investments, but they are good long-term investments. That is, for those who can stomach the volatility that comes with cryptocurrency investing.
Real estate is one of the best investments you can make. It’s a long-term commitment and has the potential to generate high returns while providing diversification in your portfolio. Real estate is also relatively low risk compared to other asset classes, though it comes with some volatility when markets dip or rise sharply. And there may be periods when you don’t see any growth.
But real estate has many advantages that make it an attractive investment choice for many investors:
- Diversification: Real estate provides portfolio diversification because it’s not correlated with stocks or bonds. In fact, real estate tends to move opposite to stocks and bonds because it responds more slowly to economic changes than other investments do.
- Low correlation: The performance of real estate correlates less with equities than most alternative investments like gold or commodities. If financial markets are doing poorly, your investment in commercial real estate could still perform well.
Don’t forget about commodities
Regarding investing in a portfolio of assets, you should not forget commodities. Commodities are influenced by the economy, supply and demand, and government regulation—and you can even trade them on a commodity exchange.
We hope this article has helped you better understand the different types of assets available for investment.
As with all investments, the key is diversifying your portfolio and not putting all your eggs in one basket. We recommend keeping these four assets in mind when planning your financial future!
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