6 Investment Diversification Options for Any Income or Age

investment diversification

Money is a hard worker – it doesn’t get tired or sick. It will keep growing as long as you allow it to. Your money will work for you nonstop with the right plan, and it will multiply, provided you give your plan enough time. The investment process is what building your wealth is all about.

Whether it’s a forex investment fund or the stock market, the outcome is the same: to get a return on your investment and see your portfolio grow. Not all investment options are created equal. An investment plan for a 25-year-old college graduate will be much different than a 65-year-old senior about to retire. And with all the options available such as foreign exchange market investing, cryptocurrency, real estate, etc., you may wonder what the best choice is. 

Luckily, a few investment options are considered a gold standard, if you will. They are suitable and appropriate for almost anyone at almost any age. Here are 6 of them you should consider.

  1. Foreign Exchange Market Investing 

Also known as forex trading, foreign exchange market investing is done on a decentralized international market that allows currency trading. This global marketplace is open 24 hours daily, Monday through Friday, and all trading is done OTC (over the counter), which means no physical exchange occurs. 

Foreign exchange is one of the world’s most widely traded markets, averaging a daily turnover that exceeds $6.6 trillion. In addition, many currencies are constantly traded as companies, institutions, and even individuals like you try to get their share of the rate fluctuations. 

  1. Mutual Funds

Mutual funds pool capital from many investors to purchase assets such as stocks, bonds, etc. In its simplest form, a mutual fund is essentially a “basket” of funds used to buy shares of different companies and organizations. This popular investment option offers investors an affordable way to make use of diversification.

Mutual funds are best suited for retirement savings and other long-term investment goals. The benefits of mutual funds are their convenience and exposure to superior stock market returns. And because the funds are a bundle of stocks, you don’t have to stress over choosing them individually. 

  1. Index Funds

An index fund is a mutual fund variation that retains stocks in a market index such as the S&P 500 or the DJIA (Dow Jones Industrial Average). The goal of index funds is to offer investment returns similar to the performance of the index. This process is in stark opposition to an actively managed mutual fund, which pays an expert to time the market and curate the holdings within a fund.

Index funds are among the best investments for long-term savings goals. Moreover, their affordability due to lower fees makes them less volatile than actively managed funds that attempt to beat the market.

  1. Exchange Traded Fund (ETFs)

ETFs, or exchange-traded funds, are similar to mutual funds as they also pool investor money to purchase groups of stocks, bonds, etc. This process then provides a single diversified investment. The differentiator is management: ETFs are passively managed, while mutual funds are actively managed investment options. 

Similar to mutual funds and index funds, ETFs can be a wise choice for long-term investing. ETFs are also great for investors who lack the capital for the minimum investment requirements for mutual funds. 

  1. Cryptocurrencies

Some investment options go beyond the typical investments covered above. They consist of cryptocurrencies such as Bitcoin or Ethereum. Crypto is a digital currency that secures transactions via cryptography. It is not centralized by a regulating body. Instead, this investment option uses a decentralized network known as a blockchain to monitor transactions and dispense new units. 

  1. Government Bonds

A loan from you to a governing body (municipal, federal, etc.), a government bond pays interest over a certain period to the investor. This time frame can be anywhere from one year to three decades. Due to the consistency in payments, bonds are considered fixed income security. And because the Canadian government backs these bonds in full faith, they are practically risk-free. 

Government bonds are ideal for investors on the conservative side who aren’t very comfortable with volatility.

Next Steps for Investment Diversification 

The best time to start investing was yesterday – the second best time is now. The sooner you start, the greater your returns will be over time. And with enough patience, the magic of compound interest has the opportunity to take effect. 

At CWS Capital, we have been serving Canadians for nearly a decade, helping them to improve their portfolio and get ahead financially. We are registered with the Better Business Bureau and operate from a place of trust and integrity. 

Contact us today to see if you meet our requirements to help with your investment planning needs.