Let’s look back at 2008 and 2020 and ask ourselves if we were prepared for those financial storms. Did we make the right decision on who our financial advisor were or how they managed our own portfolio through this turbulent time? Did we buy or hold the right assets? Did we have the right asset protection during these turbulent times?
Keeping yourself diversified with different kinds of wealth strategizes can save you from a financial meltdown.
So, what should you do to diversify and why?
Let us start with stocks, a good rule of thumb is to have more than one financial advisor. Even though one financial advisor might give you better returns, overall if your wealth is diversified into many different advisors, then you have a better chance to have a more balanced overall portfolio across the board.
Once diversifying your advisors, I would diversify your stock portfolio by, cash, stocks, ETF’s, mutual funds, REIT’s, Emerging Markets, commodities, and gold. Too me, Bonds are questionable at this time but hopefully your financial advisor will direct you in the right allocations.
I would also make sure that you have some strong dividend stocks to create the passive income that you are looking for.
In your portfolio I would always have either gold or silver as a hedge for a downturn in the economy just in case we recalibrate our currency back to the gold standard.
The strongest physical assets to hold in a downturn or hyperinflation is either real estate or gold. On a deflation scenario real estate will decline but will hold its value stronger than the stock market. Another advantage is that real estate will also bring in a cash flow if you decide to rent the property.
In a hyperinflation, even though the dollar is falling, your assets will go up. So real estate is a good asset to have going into and during a financial crisis. Gold should also hold its value or increase its value in these turbulent times.
Having a strong business is a great way to diversify your assets. Since the COVID 19 pandemic more people will be staying at home either because they are working from home or they may have lost their job.
A web business is a great way to generate passive income when building a business. Also having many different businesses either on the web, brick and mortar or real estate will also help diversity your wealth.
Other ways to diversify your wealth is by buying or selling collectibles. Collectibles are rare assets that can be picked up during a downturn because they could be acquired at a distress price. In times of trouble individuals will be selling their assets to make ends meet.
Peer to Peer Lending is where you can put money towards a company, as a loan, through an online business and receive back the original loan plus interest. This is great for creating passive income if you do not want to do anything but just sit back and collect your check.
Make sure you pick the right business because in a downturn the business might not be around to pay you back your original loan plus interest. Sometimes this vehicle offers a higher rate of return than normal financial vehicles such as CD’s and bonds. Some peer-to-peer lending companies are Lending Tree, Lending Club and Fun Rise.
Buying other currencies or placing dollars in other currencies is also a way to diversify.
If the United States losses the dollar as the world currency then it would be wise to diversify the dollar into other currencies. I recommend Chinese, Singapore, and Switzerland currency.
Another way to diversify your wealth is by legally moving your money offshore by purchasing assets overseas. There are beautiful countries that have less restrictions than the US and you might want to set up shop there.
You might consider even having different bank accounts throughout the world in case times really get tough. For me, some of these locations are Lisbon, Montenegro, Singapore, Switzerland, and Malaysia.
Sometimes in times of crisis being a US citizen does not give you the luxury to fly everywhere. There could be restrictions as a US citizen when moving around the world.
If you are a citizen of St Lucia you would probably have easier access to travel or fly throughout the world and set up residence with the countries mentioned above. A good overseas attorney could help you with this process.
I hope this helps when considering how to diversify your portfolio and protect your wealth.
Stay Smart and Stay Diversified.
For more information on diversifying your assets you can go to www.DiverseInvesting.com or purchase The Road Map to Investing on Amazon.
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