Make Your Diversified Portfolio Sweeter

Make Your Diversified Portfolio Sweeter

You walk into a Mexican store and see all the delicious candy in front of you. What do you do? Let’s say you had enough money to but a few.

Do you buy one of the same? Or do you make your life sweeter and switch it up by buying different types of candy? We hope you picked the latter because that is your best choice when it comes to investing.

You might be wondering, what each of these investment option means and we are here to tell you that you are not alone.

Let us put it as simple as possible as we munch on this Mazapan.

 

Commodities

Commodities are all those things that are limited edition or one of a kind pieces. Did you happen to score that one of a kind huarache? Well that may be worth a lot more now because the demand is high. This type of “investment” is particular in that it requires a high demand with low supply. So whether you have that vintage designer bag, or that custom pair of sneakers, make sure to know what you’re willing to pay for something and whether you are open to selling it in the long run once it gains more value.

ETFs

An ETF is an exchange traded fund that has a collection of tens, hundreds and sometimes thousands of stocks or bonds in a single fund. Similar to a piñata that has a variety of candies inside it and more likely than not you are bound to get something good out of it. Unlike buying a single stock, this method has built-in diversification. Not only that, while prices always change in the stock market, ETFs are known to be of less risk and require less work. Sounds like a good deal, no?

REITs

Known as Real Estate Investment Trusts, are companies that own, operate or finance income-producing real estate. Similar to investing in a company through stocks, there are portfolios of real estate assets you can invest in. The best part? If you invest through this method the income produced is shared amongst the stockholders and you don’t actually have to go out and buy/finance a property! We like where this is going.

Stocks

We’ve all heard of this one, oh, wait… you didn’t attend our dinero session? Well no worries you can replay it here.  Stocks are an investment in a company and when you become an investor you buy their stock to earn a return on your investment. Basically, you put money in to make more money. With apps like Stash, Stockpile, Robinhood, Fidelity and more you can invest from the comfort of your own home. So next time mami says you are always on your phone, you can say you are investing like a boss. You don’t need to have thousands of dollars to invest. With those $5 that you would’ve spent on that champurrado or those candy bars you could’ve bought a fractional share of your favorite company. Seeee, easy!

Bonds

Bonds are like when your primitos would ask you for dinero to borrow to buy their own candy. A bond can be thought of as an I.O.U. but this one actually has details of the loan and its payments. Not like your primito who might never pay you back. Bonds are units of debt issued by the borrower that are secured as traceable assets. While bonds do offer the possibility of receiving income through the interest payments, they pay out is usually lower than that of stocks, plus bond yields can fall. Mira, what we are saying is for you to consider your options. There are highs and lows. You choose!

Crypto

Ay this one is new and complicated. It’s actually the talk of the town at the moment. If you have absolutely no idea what crypto is we got you fam. We have a course that you can watch HERE that will explain to you exactly what crypto is and where it might be headed. Will you be the next crypto millionaire? Talvez, but first you have to understand the basics.

Crypto is digital dinero that gives people options for secure and even secret payments and investments. Basically it’s anonymous “coins” or “tokens” that get “mined.” Think of it a little like a crypto checkbook. So imagine if instead of your bank or credit card statement being a bunch of messages you just had one transaction everyone could see. This new form of investment is high risk and sometimes high reward. It all depends on what kind of investor are you.

Index Funds

Index funds are a portfolio made specifically to match or track the financial market index. It’s like when you get those new rayitos in your hair and your prima comes by the next week sporting the same look because she saw how popular it made you. Atrevida, but we get where she is coming from! Index funds are kind of the same. They are copying trends to ensure there are high returns. The best thing about index funds is that they provide a broad market exposure and are ideal for retirement accounts because unlike picking individual stocks you would be buying all of the top 500 companies at a low cost the index fund offers! If you ever thought that stocks are hard because there are so many options now you can get a little nibble out of a bunch of companies all at once.

Real Estate

Latinos love this one! Did you know that Latinos are 25% more likely to own and investment property outside their primary residence? Pues si, we’ve known that having a casita is a win, but having two?! Well that speaks about our dinero mindset. Real estate, AKA owning property is one of the best ways to build wealth and it can be passed along for generations. 

 

So now that you know a little more about each, which one are you most interested in? 

Remember, investing is a game that is won with time and education. Don’t be discouraged by so many options, instead see them as ways to make your life sweeter just like the candy you’re now craving from reading this article. Suerte!

 

Source: https://www.investopedia.com/terms/b/bond.asp

nerdwallet.com/article/investing/what-are-stocks-how-they-work

https://www.reit.com/what-reit#:~:text=REITs%2C%20or%20real%20estate%20investment,number%20of%20benefits%20to%20investors.

https://investor.vanguard.com/etf/

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