Concerned about your investments, their upcoming performance, and financial future?
What steps can you take to reduce your risks, and shore up your investment portfolio now?
- Take Stock Of What You’ve Got
Start by reviewing what you’ve got in your portfolio and your individual investments now.
What direction are they heading in? Where are they likely to be when you plan to cash them out, or need to withdraw?
What performance can you logically expect in the meantime?
Some asset classes may be set to crash and even go to zero. Others may suffer short to medium term value fluctuations. That may erode your overall net returns in the case of things like public stocks. Though in other cases, where there is still consistent cash flow, until you expect values to surpass previous highs, like in real estate, it can be better to hold on.
- Make A Plan To Diversify
Most investors are not well diversified at all. No, 1,000 public stocks, and funds of public stocks does not provide diversification.
You need true diversification, in different sectors and asset classes to reduce risk, and maintain predictable overall performance.
Look for deep and broad diversification, with blends of growth, capital preservation, and passive income to truly future proof your finances.
You may need to improve your asset allocation mix.
- Evaluate New Opportunities On Their Fundamentals
Don’t be a victim of the next FTX or crypto wipe out.
Look at the real fundamentals. What hard tangible assets are there for downside protection, in addition to upside potential from growth, and leveraging existing (not speculative) performance? Also consider what price you are buying in at. Is it over market value, or under?
Look at the best and worst case scenario. As well as the most likely. What can you live with? What is the risk relevant to the return? It is always a balance.
Decide how much you can afford to lose in the worst case. Don’t invest more than that in a single investment.
- Exit The Losers
Those investments that are on the way down, and are going to continue to lose money should be shed. It’s better to lose a little now, put it behind you, and start generating better returns. The other option is to just live with the stress while you keep on losing more. That’s usually not much fun at all.
Cash them out, and trade them for better options going forward.
You may utilize things like tax loss harvesting and 1031 exchanges to turn losses into wins.
- Get Great Advice
It is always when you think you have finally mastered everything and just have the midas touch that you set yourself up for complete disaster. You can be confident and humble. No matter how well you are or have been doing, always seek out advice from those that have been through similar times and situations before and get their insights.
Find out more about investing in secured debt and real estate, go to NNG Capital Fund.