Having different investments with different risks balances out the overall risk of the portfolio. Because portfolio diversification keeps some of your money in investments that have stable, if not impressive, growth options, and diverts some of your money to riskier but higher-yielding investments. Diversification is simply a strategy for spreading your money across different types of investments that reduces risk while still allowing your money to grow. This also means that you can combine investments to create a complete and diversified portfolio, that is, more secure.
This doesn’t necessarily mean buying a house or becoming an owner – you can invest in REITs, which are similar to real estate mutual funds, or through online real estate investment platforms that collect investors’ money. The “general stock market” fund will give you access to several thousand of the largest US stocks, while the “world stock market” fund will allow you to invest in foreign assets. To diversify, you can invest in different asset classes such as stocks or bonds.
One of the easiest ways to build a diversified portfolio is to invest in pooled investments. Mutual funds provide instant diversification by pooling investors’ money and using it to buy a basket of investments that fit the fund’s stated purpose. It may include mutual funds, bonds, stocks, savings accounts and other investments. Some of these are inherently riskier than others, so portfolio owners gain a sense of security from the safest investments and the opportunity to earn higher returns from riskier investments.
Early in Vitamin Water’s story, 50 Cent agreed to endorse the product for a minority stake in the company. Together, Curtis Jackson and Vitamin Water ditched Formula 50’s signature drink. A decade later, Coca-Cola’s acquisition and Vitamin Water’s minority stake in the 1950s is worth $500 million.
Not all of 50 Cent’s investments have hit the big time – his collaboration with SMS Audio on headphones hasn’t caught on like Beats by Dre – but the rapper has a successful film company called Cheetah Vision that makes low-budget action films for foreign markets, which makes Roger Corman from hip-hop. hopa 50 cent. Billy Joel’s passion for helicopters has been well documented as he boasted, “I even rode my motorcycle in the rain.” There is also a great photo from the New York Times magazine.
Parrot King Jimmy Buffett turned his love of lounging on the beach and drinking cocktails into a craft industry. Buffett seems like an odd choice for his Hard Rock Cafe themed restaurants, but Margaritaville and Cheeseburger in Paradise now have restaurants in dozens of cities from Australia and Waikiki to Cincinnati and Biloxi.
While saving money and paying down debt are also important financial goals, planning for your future by investing in money that can grow over time is just as important. Investing is one of the best ways to build wealth and achieve long-term financial goals. It’s worth taking the time to review your investments and look for opportunities for diversification.
Diversification is your best defence against the failure of one investment or low-yielding asset class (such as a stock market crash or a fund manager going bankrupt).