The uncertainty of the market has us all thinking about how our investments are doing. Even during times of inflation, interest rate hikes and talks of recession, investing is key to building wealth. Here are strategies you can consider when assessing, building or changing an investment portfolio.
Index Funds
An index fund is a type of investment that is composed of stocks or bonds intended to mimic the performance of a financial market index. These types of funds offer market exposure, relatively low expenses, and low portfolio turnover. Index funds are a passive investment strategy, which means you do not have to make adjustments actively and routinely since the fund changes their investments based on the index they follow. You can diversify by choosing index funds that follow different indexes to make sure you have a good mix of investments.
Exchange-Traded Funds
Exchange-traded funds are similar to mutual funds due to the pooled investment strategy, but ETFs track a specific index, sector, commodity, or type of asset. ETFs can also be bought and sold on a stock exchange. A benefit of exchange-traded funds is that they are more cost-effective and liquid than mutual funds. Several types of ETFs exist, including passive, active, stock, bond, industry, commodity, and currency. ETFs can allow you to be more specific in the type of investing you are looking to do, which can add diversification as well.
Real Estate
Real estate has consistently been a valuable investment, even with the ebbs and flows the housing market experiences as we see the value of property grow over medium to long periods of time. One way you can invest in real estate is by purchasing an income-producing property, whether this is a residential, multi-family, commercial, or office rental property. However, the life of a landlord is not always glamorous.
Another option is Real Estate Investment Trusts, also known as REITs. A REIT is a company that owns, operates, or finances multiple income-producing properties. Like a mutual fund, these REITs pool together the properties to allow investors to earn income from real estate investments without the leg work of owning an income-producing property yourself.
One way you can invest in real estate is by purchasing an income-producing property, whether this is a residential, multi-family, commercial, or office rental property.
Market volatility is bound to happen so it’s important to expect growth and decline over time. One of the key tips when investing is to keep your money invested. It’s scary to see your portfolio decline in a down year, but selling at the bottom can severely harm your returns over time. This is also a sign that you should continue to diversify your portfolio in an effort to minimize risk.
Investing is key to building wealth, but it can be difficult to handle your investment strategies yourself. Our advisors at LifeBridge Financial Group are here to assist in managing your investments to ensure you are on the path to financial success. Schedule a consultation with us today to get started.
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