| In a previous article I discussed why investing only in the S&P 500 could leave you exposed to risk, particularly with its increasing concentration in tech stocks.
Today, i’ll introduce ideas that can provide more balanced growth and reduce risk.
And the best thing: many of these can be done simply with set-and-forget funds and ETFs …
The list below provides choices for smarter investing. You wouldn’t expect to invest in all of them – only ones that resonate with you …
Listen to this article in an interview format. It’s surprisingly good with Ai converting my article into an engaging conversation.
1. Real Estate: REITs
REITs are a passive way to own property, with all rental income received tax-free (inside your ISA and pension).
In this week’s live Investment Academy class we identified and evaluated the following …
- a REIT that owns warehouses, tenanted by Amazon. Paying a dividend yield of 7.2% pa
- a REIT that owns GP surgeries and NHS heath centres. Pays a dividend yield of 7.5% pa (dividend has grown every year)
- REITs that own care homes – paying 8.1% pa
💡 For more insights like this – straight to your inbox – leave your details in the box at top of this page ☝🏼
2. High Dividend Stocks
A smart way to diversify is owning stocks that generate reliable income.
Finding quality blue-chip, high dividend stocks paying between 5 to 8% pa is a key pillar in our Investment Academy. We use screening tools to discover quality stocks that don’t just pay high dividends, but are also healthy. So that means solid branding, low debt and high profitability.
Dividends complement capital growth by reducing volatility and providing cash flow – even during market downturns.
3. Options for Recurring Income
Used correctly, options can be a powerful tool for creating monthly income – without excessive risk.
Options let you rent out quality shares for monthly income of 1-3% per month. This video is a good explainer.
For example, selling ‘covered calls‘ on dividend stocks earns two income streams: the dividend itself and the premium received from the option. This strategy generates additional cash flow while holding quality stocks.
4. Gold
Gold can stabilise your portfolio against crises and fear-events. It is a volatility hedge. But contrary to popular belief, gold is not an inflation hedge.
My article (and video) has all you need to know about Gold and how to invest effectively.
5. Emerging Markets
Markets like India, Brazil and China provide exposure to faster economic growth and rising consumer demand. They may be more volatile but can enhance returns over the long term, especially when paired with developed markets.
6. Bonds and Fixed Income
Like gold, Bonds can serve as a hedge to your equity and property assets, particularly government bonds. But bonds pay an income.
Although bond returns have historically been much lower than stocks, bonds can play a critical role in reducing portfolio volatility, providing stability and income during times of stress.
7. Thematic Investments
There are many exciting themes, all available through simple passive ETFs.
They include long-term megatrends like renewable energy, healthcare innovation, Ai and cybersecurity. These themes benefit from long-term growth as global priorities shift.
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In Summary: Global Balanced Investing
Investing globally spreads risk and captures opportunities worldwide.
For complete diversification, you need global stocks and global bonds. These are called balanced funds which get automatically diversified and rebalanced by the provider.
You literally set-and-forget. No monitoring required, whichever way the world shifts.
This is the essence of how we train investors to master their own financial future. Learn more here.
Always Remember:
- Time in the Markets always beats timing the markets
- Stay Diversified
- Minimise those leakages: Fees, Inflation, and Taxes
- Financial Markets are a great source of recurring income
- ETFs, Balanced Funds and Options achieve all the above
- Being educated helps you outperform 99% of the population
… to ensure your investments work for YOUR financial freedom (not someone else’s)
And …
For more guidance, our Investment Academy will help you implement all of this in a step-by-step way.
Thousands of people have learnt how to diversify and pound-cost-average into low-cost, set-and-forget ETFs & Funds for inflation-beating growth. And Options to create recurring income.
Click here to learn about our Investment Academy
Finally …
– Don’t take the above as advice as it may not apply to you personally
– Your Capital is at Risk
– You may not be covered by the FSCS
– Anything mentioned in a podcast or in a previous article was valid at that time and may not continue to be now
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