Most investors take an asset-allocation approach to their money management, so they split capital between bonds, stocks, cash, real estate, gold, and private businesses. Some investors also consider investing in song rights, patents, and other property. The goal here is to find the right model, which can be challenging if you’re new to investing. However, companies like EuropeFX can help you determine the right model and companies in which to invest.
Model That’s Right for You
You have different needs than any other investor, which means one particular model for asset allocation will work for everyone. The stage of your life and needs are going to shift throughout the years, so that means your model and portfolio can change, as well.
Growth Asset Portfolio
For young and middle-aged adults, your portfolio should focus on growth. The goal here is to build wealth while you’re young so that you have enough money for retirement. You may also want to consider putting your children/grandchildren through college.
Capital Preservation Model
The goal for this portfolio is to protect what you’ve earned and gotten returns on because you want to ensure that it is there for the long term. You may have put down a cash payment on a house or want to have plenty of money to live on during retirement. In some cases, you just want to pay your bills regardless of your job. If your goal is to preserve capital, you have a few asset options that should be considered and real estate, and private businesses can be some of the best options.
If your goal is to have a balance between assets, you’re likely to invest equally in a variety of options, which can include stocks, bonds, real estate, and more. However, you may end up putting a little more money into certain areas and less in others, depending on your overall needs.
Submit your review