One of the most important things to take into consideration when building up your financial portfolio is how you’re going to set about diversifying it. The last thing you want to do is put all of your eggs in one basket. That being said, the same goes for diversification itself. You don’t want to bet everything on one method of diversifying your portfolio.
Instead, you’ll want to explore the different kinds of financial diversification and see what benefits they can offer you.
Reviewing Your Different Options
To begin with, it’s important to note that while stocks, bonds, and mutual funds are perhaps the most well-known assets that one can hold as part of their financial portfolio, they’re not the only options out there. For those who prefer fixed assets in particular, there are quite a few more options to explore, including real estate and gold. The former has the potential to grow considerably in value, while the latter offers greater security, with gold being one of those resources that is nearly always valuable. Adding one or both of these assets to your financial portfolio can help you hedge your bets against a sudden financial downturn.
Stocks and Dividends
When it comes to financial health, the name of the game is to keep the money coming in no matter what. While it might be nice to have stocks performing well and other assets increasing in value, your most immediate need is to have cash coming in.
That’s why you’ll want to supplement your traditional lineup of stocks with those that can be trusted to pay dividends in the short term. These dividends can ensure that you get paid every quarter even when your stocks aren’t growing. That kind of financial safety net can allow you to be more adventurous with the rest of your stocks and investments.
A Fixed-Index Annuity
Finally, you’ll want to consider looking into a fixed-index annuity. These investments defer tax payments and offer long-term protection for your financial portfolio.
Talk to a financial planner and figure out which of these best suits your particular financial needs.