Stocks, investments, portfolios… all of it can be so complicated. There’s a real benefit to having a diverse portfolio for investments, but its hard to know how to successfully put your money in the right places in order to obtain that. WiseDime is going to break down the three most important parts to diversifying your portfolio so you have the strongest investment possible.
The most simple form of investing, buying individual stocks means that you hold a share of the company. The advantages to this in a portfolio is that the share returns usually run between 7 and 9 percent, and it allows you to choose which companies you want to have your hand in.
Individual bonds means that you are lending money to the company that created the specific bond. The advantage to this in a portfolio is that bonds don’t fluctuate like stocks do. By putting your money into bonds, you can ensure more financial stability.
Futures contracts are a bit more tricky, as they require you to sign an agreement which binds you to either buying or selling a commodity or financial instrument at a fixed price on a specific day. The advantage to this in a portfolio is that they are quicker ways to buy and sell orders without a long wait.
Make sure to watch the full playlist above for more information about balancing out your investment portfolio.