If your savings in the bank account is limited, you needn’t invest in most asset classes to create wealth. You can steadily increase your fortune if you rely on a mixed portfolio of asset classes consisting mainly of stocks and commodities. For an average investor, it is better to avoid real estate because you need a huge amount and have to remain invested for considerably longer. Besides, real estate isn’t liquid, and if you need cash in emergencies, you cannot sell your piece of property easily as it needs a lot of paper works.
A mixed portfolio will allow you to be flexible and get things under your firm control. It is also interesting that when stocks rise, commodities remain firm, and when a stock falls, commodities tend to rise. Further, commodities can hedge against inflation as they are the least affected. For this reason, some financial and investment experts, such as https://www.robomarkets.com/, advise investors to have a mix of both stocks and commodities.
Invest Money in Parts
Just as it is important not to invest your money in one single portfolio or class of asset, it is also imperative that you invest your money in parts if you aim to build wealth in the long run. A good finance and investment professional can guide you in this matter. It also helps you to cover your loss when one of your asset classes underperforms.
When you invest money, you should also aim for regular portfolio rebalancing, as most finance and investment professionals suggest. It is usually done according to a specific period or when you find certain assets are regularly underperforming.
Some believe that considering the relative weight of the asset class and ascertaining the increase or decrease in their value, you should go for rebalancing as this leads to a faster way to enhance your wealth.
Commodities are Good and Safe
Unlike stocks, investing in commodities is relatively safer, although not a faster way to accumulate wealth. Commodities are tangible assets like gold, silver, crude oil, etc., which do well when the stocks fall. A mixed bag with money in stocks, bonds, and commodities can be easier for you to rebalance your portfolio easily.
If you are considering investing in mutual funds or the more popular ETFs or Exchange Traded Funds, you can aim to invest in the latter, which has more exposure to commodities. These specialized ETFs are also good ways to park your money against inflation.
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