Investment Survey - Diversification within or between Investment Sectors?
Just yesterday I received an email from my cousin, asking about investing. She sent it around to the whole family, and I hope she let's me take a look at the results when they all come in. Here was what she sent:
What advice would you give a 17 year old who is trying to invest? ( Places to invest, places not to invest, types of investment, how much money to put in)
This made me happy, and seemed pretty intelligent. I answered her as follows:
I would ask the 17 year old what are her goals? The first thing to understand about investing is that it is not one thing, it is the application of a strategy; choosing investments will be based on priorities established in the goal.
All investments are basically a trade-off between risk vs. security, liquid vs. illiquid, high vs. low returns vs time. Within those multiple spectrums we can classify any investment. A risky investment with low return? No one ever recommends those. A super safe investment with a quick high return? People call these 'too good to be true (ie SCAMS!). Municipal bonds pay really low returns but its unlikely that municipalities default. Loaning your best friend money to start their own business has a ton of risk, but might yield you a major benefit if successful.
What are you trying to do? If you are saving for college you might be too late for 'investing'. If you are saving for retirement we have many decades to work with, so the discipline becomes more important. Are you saving for an opportunity? If so liquidity becomes important. Land can be a great investment (I bought some), but it is not liquid, its time consuming to sell. You can borrow against it though....
Infinite options exist within the word investing. My advice: (1)Define your goals (2)Infer characteristics of ideal investments (3)Come up with a list of options (4)Run cost-benefit analysis of each option on the list (5)Diversify
My personal strategy is to avoid stocks and bonds right now. Hold cash and precious metals (maybe some crypto) because the economy is due for a nice crash. Once it crashes, things are cheap and you can use your cash and silver to buy stocks and land. Also, start a business.
As more questions, get more answers - Good luck and God Bless :)
As I logged into STEEMLEO, I noticed that the talk of the week was about
'What is my most Heavily Weighted Investment Sector and Why?'
My current portfolio is heavily weighted towards Land and Crypto. This is mostly an artifact of me not having a very big portfolio, but having some land and some crypto.
These two investments are at the opposite ends of the spectrum. While my crypto-portfolio's value can be calculated and changes tracked hourly, its very hard to determine the appreciation value of the land, if any, until I sell it. In the event of something catastrophic that I do survive, the land will continue to feed me and my family while the crypto might not exist.
My crypto portfolio, on the other hand, is extremely diversified across several blockchains. The asymmetric risk, networking opportunities and potential to learn and apply programming to daily tasks has kept me satisfied with crypto in general and #steem in particular throughout this bear period.
I sold all of my silver during the last pump (2012), and all of my stocks during their last pump (2007). As the future unfolds, I would be very interested in leveraging an entrance back into carefully selected stocks when they become undervalued once again. Part of me really wants to get back into precious metal but I have no where trustworthy to put it, ironically cryptocurrency seems safer than gold to me, as local thief is much more common than global grid collapse.
Join in the #leowritingcontest to share your strategies!
Posted via Steemleo | A Decentralized Community for Investors
