How to create your investment strategy, and what are the alternatives? In this Expert Insight Interview, NuView Trust Vice President, Jason DeBono, talks about the importance of investment diversification.
The interview discusses:
- Real estate options
- Real estate versus stock investments
- Investing in private businesses
Real Estate Options
When investing in the real estate market, you should be aware that there are many options rather than just purchasing apartments. To build your investment strategy that will progressively maximize your wealth, you should use your savings in the best way. One of them you might consider is real estate syndication. It has many advantages like shared risk or a smaller amount of investment. When combining resources with other investors to purchase or manage the property, members share the risk that is equal or in proportion to their investment. Hence, you will not have significant losses in case of nonpayment, while as a single proprietor, it is not the case. There are plenty of options you might consider as multifamily blocks, office buildings, shopping malls, boat sleeps and storage units, etc.
Real estate vs. Stock investments
When investing, people usually stick with more popular options. Investing in the stock market is mainstream but often very unpredictable in the long term. When buying shares on the stock market, there are things that you cannot anticipate nor evaluate because of the lack of information. Regardless of your capability or background in a particular field, you cannot have access to the company’s insides. Hence, you will never be sure of what they are doing. So, when it comes to shares, you will have to rely more on optimism and patience rather than facts and analysis. When it comes to real estate investments, on the other hand, it is quite simple to do mathematical evaluations, and there is more information about future trends. It is a safer way, but the reward is not as high as it is on a dividend.
Investing in private businesses
Often, people have delusion when it comes to investments in private businesses. They believe that you should be an expert or big company, but this is not necessarily true. Rather than buying shares in companies such as Tesla, you might consider investing in your friend’s business model that you are already familiar with. This option will give you more safety. We should not forget that all big companies started like this, with private investments. If so, the question we should all ask ourselves would be if it is more sustainable to invest our hard-earned money in something that we do not have control over rather than choosing the more reliable option.
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