5 Investment Options for a Balanced Portfolio

September 20, 2023

To say that today’s financial landscape is volatile is an understatement. Things had already been a challenge for some time but became wholly unpredictable after the onset of the COVID-19 pandemic in 2020.

Because of that, building a balanced investment portfolio has become of paramount importance. This is true both in terms of long-term wealth creation and with regard to risk management.

Of course, everyone’s investment journey is different – meaning it will take a combination of techniques to help you accomplish your goals. As you begin to develop a strategy for yourself, there are a number of key options to keep in mind.

Embracing Wholesale Real Estate

Making sound and strategic real estate investments is one of the biggest opportunities you have to build a balanced portfolio. They offer capital appreciation and additional benefits like rental income, serving as a tangible asset, and more.

Even if you don’t necessarily have the money required to get into “traditional” real estate investing, know that other options are available. Case in point: wholesale real estate investing. Here, you’re essentially bringing a seller and a buyer together. You get the seller of a property (typically distressed) to agree to one price, get a buyer to agree to a higher price, and the difference is what you get to keep.

This can be a great way to get into real estate investing and begin to build a network of connections without much of the risk typically involved. Yes, you have to do your due diligence and find the right properties in the right area. But you don’t have to worry about fixing up the property because the buyer will (presumably) do that. That’s just one example of a method you can use to get into real estate investing — rest assured, there are many more.

The Long-Term Benefits of Stocks

No discussion of creating a balanced portfolio would be complete without touching upon stocks – one of the most common forms of investing there is. While it’s absolutely true that they can offer high returns (provided that you’re making educated decisions about where to invest your money), they also come with higher risks.

When it comes to the Stock Market, it’s essential for you to understand that there is no such thing as a “sure bet.” Not only should you avoid putting all your money into one particular company, but you also shouldn’t keep your wealth in one particular type of stock as well. Professional investors often have great success in the Stock Market, but at the same time, it can (and often does) become a full-time job to reach that point. For personal investors, stocks should be a part of your portfolio – but they should also be just one small part of a much larger investment story.

Don’t Count Out Bonds

Another great opportunity to diversify and create the most balanced portfolio that you can has to do with bonds. They’re notorious for providing a much-needed level of stability and income generation in equal measure.

Not only do you get the principal amount of the bond back once it reaches its full maturity, but you are also guaranteed a set amount of interest as well. They’re straightforward, reliable, and a perfect way to grow your money over time. For these reasons, they’re often ideal for more conservative (read: risk-averse) investors in particular.

Why Mutual Funds Matter

Many investors have found success by including mutual funds in their portfolios. These, along with exchange-traded funds (also referred to as ETFs for short), provide a much-needed level of diversification by pooling money from multiple investors into various assets.

Mutual funds come with many advantages, including but not limited to things like advanced portfolio management, convenience, and even fair pricing. They also give you the chance for dividend reinvestment- something you won’t find elsewhere.

Leveraging Alternative Investments

Finally, don’t be afraid to venture off the “traditional” path and put a few alternative investments to work for you. Over the last few years, a number of options have grown in popularity, with commodities, hedge funds, and even private equity being chief among them.

These types of alternative investments can provide unique opportunities and further diversification of your portfolio at the same time. Remember that the more diverse your portfolio is, the less vulnerable it is to any one single point of failure.

Again – there is no “one size fits all” approach to building long-term wealth while mitigating as much risk as possible. As the events of the last few years have shown us, disruption is equal parts constant and unpredictable. We know that it is right around the corner, but few can anticipate exactly what shape it will take – and when.

Because of that, success in building a balanced portfolio is less the product of any one major move and is more about a series of smaller and more strategic ones. By combining techniques like wholesale real estate, bonds, mutual funds, and others in a way that makes sense, given what you’re trying to accomplish, you can enjoy all the benefits of building a portfolio with as few of the potential downsides as possible. But more than anything, know that understanding these investment options and the risks and rewards they offer is a core component to achieving a resilient and prosperous portfolio moving forward.


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