Best ways to diversify your investment portfolio
Investment portfolios are one of the best ways to ensure you have enough money to maintain your standard of living in old age, or when you simply want to keep some funds aside for a rainy day. While storing your capital in a bank might seem like the easy option, those funds will not grow at the kind of level that will help you deal with inflation over the years, which could leave your hard-earned cash seeming flatter than it first appeared.
One of the best ways to deal with this is to invest in things that bring you a reliable and decent return that you know will bring in some good results, and also boost your capital earnings. However, it is always important not to put all of your eggs in one basket, and this rule is vital here.
If you keep all of your investments in the same place, you could end up with a sudden overnight crash in an industry, some unexpected financial insolvency for a wealth management company, or a major currency could start to plummet.
We cannot predict every twist and turn when it comes to financial markets, else we would all be rich overnight, but there is scope to look at some of the best alternative investments for your portfolio to make sure you do not get caught cold.
Of course, you could choose not to manage most of it, and there are plenty of online stock brokers out there who can help you with your decision-making, but there is more to consider than that.
For a start, it is possible to consider how some of the newer products on the market work, and how they have been used to great effect over the last few years. For example, who would have thought that the last UK General Election would have played out like it did? How many people would have correctly indicated that Brexit and a vote for Donald Trump in the White House were on the way?
If the answer was yes to all of those, election spread betting could well be one of the best alternative portfolio diversification options out there. Even if it was not, with the way the world markets are heading right now, it could actually be one of the safer bets.
Emerging markets have been on the way down for some time, in part because of the ongoing trade standoff between the US and China. The strength of the dollar is also a big issue for currencies that find themselves intrinsically tied to it, as they have few other means to raise large amounts of capital to change the course of their currency pairs compared to other nations.
This means that while forex is still a viable mechanism for investments, there are lower margins to be had which means returns are down unless you are investing and playing with more liquidity to allow for that same level of flexibility that would have existed previously.
With that in mind, betting on how elections are going to turn out suddenly makes a lot of sense, especially because this is what is driving a lot of the market change we are seeing. There have been more so-called populist movements challenging for government in recent times, and one of the key trends out there is that parliaments are being split up from traditional two-party settings into more factional politics. While it may seem as if this is harder to call, the news trends that accompany these never tend to be too far off the mark, and it means you can get an idea of who is going to be in the running.
Of course, if you are able to track these developments and bet on the market movements, you stand a chance of doing well in diversifying your investment portfolio and improving your alternative investment strategies. It seems clear as we head towards the next decade that traditional financial products are no longer a guarantee of success, and disruptive technologies are now paving the way.
One of the best examples of this is crypto-currencies, which have taken the world by storm over the last few years. These have only been made possible by technology, and we have to wonder what new tech will emerge in the next decade that will open up new investment possibilities. For now, there are several interesting new markets worth your attention that can give you peace of mind about now leaving all of your money in one place.