Diversifying Your Investment Portfolio Beyond Stocks And Bonds: Commer

When we think of diversified investment, we think of a portfolio with different assets which have the highest return for the least risk. Different assets (stocks, bonds, commodities etc.) are differently affected by economy fluctuations.

Investing in a diversified portfolio means lower overall risk. This is so since if one asset decreases, the other one can increase, or decrease by a smaller percentage. Diversifying your portfolio is a good idea during financial crises.

Usually crises occur every 10 years, and so it is understandable that any investor who invests in the long-term will be affected by at least a few crises. That's why diversification can be the smartest step that any smart investor should consider.

Can you think of the decline in stocks asset value back in 2008? 

Investors got afraid and started to allocate their assets when stocks dropped more than 30%. In just a few months the US economy lost 22 Trillion dollars.

But still there are investors who have the same type of investment, just from different sources. Actually this is not really diversifying a portfolio, even though your stock broker might tell you that. 

Bonds are loans that are given to a company, on a fixed period of time, for a fixed interest rate.

Since bonds are fixed-income investments, it is no surprise they do pretty well during an economic stagnation. Investors in bonds want lower risk, so they take lower returns on longer periods of time. 

During economic growth-periods, Stocks are a good option. They grow when the company grows.

When everything looks good, investors are becoming more confident and are looking for the highest returns, so they bid shares up. Most investors are highly optimistic, and therefore take higher risks during growth periods. 

However, due to financial crises, investing in paper assets is not always a good scenario. 

Now, I guess you will want to invest your money into something that is more ''real', more tangible.

Commercial real estate is a good way to diversify your portfolio and be less affected by market fluctuations. Perhaps this is the best investment choice.

Getting the most out of your investment means investing in single-tenant Triple Net Lease properties which have reliable, well-know tenants such as Taco Bell, 7-Eleven, or any other restaurant brand. 

We know that Triple Net Lease properties are those types of lease agreements where the tenant is responsible for maintenance work and property related expenses.The landlord is not responsible for any expenses. He just takes rent from the property with no liabilities towards the property during the lease agreement..

When you buy a relatively new property, on an attractive location, there is a very little risk of  property remaining vacant. Plus, properties usually appreciate. And you get many tax benefits.

These are some of the benefits you get from investing in commercial real estate. 

• Full control over your investment
• Leverage debt
• Tax benefits
• Intrinsic, safe value
• Positive cash flow
• Less volatility
• Joy of ownership
• Value protection

If you want to learn more, you can read the whole article here.