A guide to diversifying your investment portfolio

While looking after your health may be the best investment you can make for your future, there are other investments you can make that will ensure you will be financially healthy as well as physically healthy. 

You might already be investing in property- either renting it or buying a property and flipping it. This is a sound investment and certainly a very safe one. However, it is important to not just limit yourself to one investment. By diversifying your investments you broaden your investments (and potential income) and reduce the exposure to any one particular asset or risk. 

Precious metals

A diversified investment includes investing in precious metals. Gold and silver should form an integral part of all investment portfolios as they are the best hedge against a stock market crash. Buying physical gold or silver as an investment is an excellent way to diversify your investment portfolio but does require a good knowledge of this area of investment as well as a sound knowledge of the economic reasoning for investment. You can invest in precious metals in a number of ways. The most common way is to invest in bullion bars or bullion coins which is the physical possession of the metals. This means that you own an asset outside of the financial system which reduces counterparty risk. If you invest in gold through a gold exchange-traded fund (EFT) you don’t physically own the metal, which means you have to rely on the financial institutions holding it. Making an investment in precious metals is increasing in popularity as a result of the uncertainty surrounding the global economy. 

Small-cap shares

A small-cap is a company with a market capitalization of between three hundred million and two billion dollars. This doesn’t sound small, but most trading companies won’t even look at the market capitalization of a company until it reaches around five hundred million dollars. The advantage of investing in small-cap shares is that you are able to beat institutional investors and its upside growth potential that can see you reaping some very significant financial rewards. You can learn more about this investment and find small-cap shares to buy on verified websites. 

Cryptocurrency

Cryptocurrencies have been a trending topic over the past couple of years. In terms of investment, the birth of the blockchain has brought with it many investment opportunities. Buying popular cryptocurrencies such as Bitcoin, Ethereum, or Litecoin is a popular choice for people who believe that cryptocurrencies will soon offer a high return on investment. Some predictions put cryptocurrencies such as Bitcoin will reach a value of $100,000 by 2025. 

However, you choose to invest your money, remember that the best way to protect your investment is to diversify and spread your risk across different types of investments. As we are never sure what the market will do at any moment, it is important to have a sound investment strategy that may include any of the above investment options.