If there’s one rule that investors live by, it’s that you should never put all of your eggs in one basket. While there are some conflicting voices (the great Warren Buffet once said that ““Diversification is a protection against ignorance, it makes very little sense for those who know what they’re doing.”), new and cautious investors are keen to mitigate risk through diversification. Even if you do prefer to put all your eggs in one basket (and watch that basket like a hawk), you’ll never know what you’re missing if you don’t step out of your comfort zone.
Diversification isn’t just about avoiding risk, it’s about getting a feel for different markets. This is as true for stocks, shares and other commodities as it is for property. It’s often not until we step outside of our comfort zones that we find a prospect that we truly fall in love with. But how do you add variety to your portfolio without taking on an uncomfortable level of risk? Let’s look at some commodities that might add a touch of spice to your portfolio. Needless to say, you should start small and get a feel for any market before.
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Be unconventional in your stocks
Tired of tech? When investing in stocks and shares, keep an eye out for unconventional startups and watch emerging new markets that are ripe with potential for growth. The still burgeoning CBD and cannabis markets, for instance are primed for further growth, especially if we see legalization on a federal level. Don’t take our word for it, view the financials here. There’s nothing wrong with taking a cautious but unconventional approach to your stocks.
Take the plunge with crypto
There are many investors who won’t go near cryptocurrencies. But the crypto market is no more or less stable than the world of fiat currencies. If anything, crypto is a better investment because its value is not beholden to the economic health of any given country. Furthermore, there’s more to crypto than Bitcoin. Take a look at these Bitcoin alternatives you may want to consider.
Wine? Ain’t that fine!
While you certainly shouldn’t sink a disproportionate amount of your portfolio into fine wine, it can nonetheless prove a worthy addition that adds a little extra variety to your investments. Wine should be viewed as a medium to long term investment. Of course, if you know a lot about sourcing and storing wine, you’re at an inherent advantage. And if your investment should tank, you’ll always enjoy being able to drown your sorrows.
That’s so metal!
Finally, it seems as though in the digitally-led 2020s, relatively few investors have much enthusiasm for precious metals like gold, silver, palladium and platinum. However, these are perfect for adding spice to your portfolio. While their volatile nature necessitates a cautious approach to investment, they can prove just the wild card you need when you need to liquidate your assets at the right time. You don’t even have to invest in the physical metal. You can instead gain access via the derivatives market, metal ETFs, mutual funds, or even stocks in mining companies.