Here Are the Pros and Cons of Diversifying | Oftentimes, just want to have that extra cash. Not only to pay off the remaining bills but also, to pursue a dream business or to add to our emergency fund. Financial freedom refers to something many people want, yet it often eludes many of us. With the right choice of investment avenues and strategies, though, one can minimize losses and achieve the desired yields. Some people re-balance their investments portfolio. By including high-risk, high-profit asset class together with another option whose surrounding variables they can control. Of course, that just remains one strategy.
Re-balance your investments portfolio with peer-to-peer lending
Building and diversifying one’s investment portfolio can be done in a number of ways. Seasoned investors know that diversifying should be done right and at a moderate level. The end goal is still to be able to meet financial goals. A person who is about to retire, for example, would want to protect his life savings. So, he would opt for investments that give him some control.
Diversifying vs Concentrated Investments Portfolio
What exactly does diversifying your portfolio mean? In essence, it means seeing to it that not all your funds are tied up under just one type of investment.
Diversifying an investment portfolio is based on the premise that one investment may possibly perform poorly over a certain length of time. So, if all your capital is stacked into a single investment and things do not go favorably, it can throw you off balance. It can result in a huge loss of funds, not to mention anxiety. For people who have fixed their attention on just one investment strategy, like stocks. For example, a diversified portfolio connotes purchasing shares across different industry sectors. However, that would be like having different colors of eggs, but they are all still in one basket.
Experts advise keeping an open mind about non-traditional or alternative investments. Instead of putting all funds in one basket, an investor is advised to put their money in different assets. For example, one may invest in real estate and rent it out to generate an income stream; on a cryptocurrency like bitcoin that has been carefully studied and understood. And, also allocate a minimal amount for peer-to-peer lending. Now, the trajectory of Bitcoin’s dominance has gone on a downward trend and a sharp drop is nothing new. But, the other two investments may perform better over the same period. Thereby, reducing potential losses to that investor’s portfolio.
Another approach, again depending on one’s personal goals, is to avoid those investments that pose the highest risk.
It pays to have an alert eye out for investment opportunities that suit you best. You may want to choose investments that do not suck your energy and happiness. Nor create big stress, nor those that require a huge audience (including tapping your network of family and friends) to reap profits right away. A nicely diversified portfolio ensures not just additional streams of income. But, also reduced overall risk since it is spread out to different asset classes or avenues. That is one of the clear advantages of a diversified portfolio. Besides mitigating risks, diversifying into other investment options opens up opportunities for possibly reaping more profits.
Indeed, diversifying one’s assets offers such benefits. But, when there are pros, come the cons. The downside of a diversified portfolio versus a concentrated one is that overdoing it could lead to only average returns, plus additional transaction costs. You need to spread the risk but not spread your funds thin.
Re-balance your portfolio via a peer-to-peer lending platform like Blend.ph
With a peer-to-peer funding platform, investors get to exercise greater control over the specific investment compared to what they are able to do with most other investment vehicles. The platform handles all of the administrative tasks of the loans. This also includes underwriting, loan disbursement, and the other stages. The monthly payments are then remitted to the lender/investor on each loan. Monitoring is also kept to a minimum. The investor simply has to select which loans to invest in. Then, sit back and collect the payments (and interest earnings) on each loan.
Nowadays, people keep looking for surefire ways to generate streams of income. Some sell products online. Others post videos (which may take a long time to get monetized). Meanwhile, others start a small business. A promising investment vehicle is peer-to-peer lending.
You can diversify your investment portfolio with one of the Philippines’ leading peer-to-peer platforms, Blend.ph, and earn as much as 30 percent per annum. One of the good things about the company is its human touchpoints it opens up conversations through its social media sites and other communications, leading people to inquire and know more about its products and services, to relate, and eventually invest their money online.
As with any other investment, there is the risk of default borrowers. But, Blend.ph’s platform provides investors with the necessary tools and services to lower those risks. There are two arrangements: the standard Peer-to-Peer Investment, and the Auto Invest option. This, on the other hand, offers a secure and risk-free nine percent interest of the capital investment per year.
Check out these opportunities to build your portfolio and reach your financial goal. Blend.ph is managed by Inclusive Financial Technologies Inc. For inquiries or assistance on helping keep your investment portfolio on track, send your message to email@example.com.
Aside from being a businessman, Josh Austria has been working in PR and media industry for more more than a decade. From his years of experience as the Marketing and Advertising Head of Village Pipol Magazine, he has built strong relationships with creative people, brands, and organizations.