Best Investment Strategies: 6 Assets For A Stronger Portfolio
Always continuing to search for the best investment strategies is a quest financial experts will always be on till the end of the time!
“Some people hate change. But you have to accept it if it is a disaster.”
– Elon Musk
We find Investors are short-term oriented, which is why many investors hold on to the stock market even when it’s in a downward trend or due for a correction.
You are not the only one who has lost faith in the stock market or is looking for a safe and profitable place to invest outside the stock market.
Why do nervous investors continue to trust stocks and mutual funds?
One of these reasons we think it is.
- “Already made my mind up.” They don’t want to change their strategy, even though they are unhappy with it.
2. “Risk equals rewards.” Many people mistakenly believe the stock market rollercoaster ride is necessary to make a good long-term rate of return. Naturally, this belief is ingrained in us!
3. “You don’t know what it is.” Many investors aren’t aware that there are other options. They lack the confidence, knowledge, and guidance to find better options.
4. “What’ll they say?” Many people have relationships with advisors, investment planners, and representatives who don’t offer alternative investments or who actively steer clients away from them.
Financial advice is very limited. It focuses on “how much of your portfolio should you have in stocks and how much in bonds.”
We say “Neither of these!” Mutual funds and stocks ultimately depend on speculation. Bonds (depending on whether you’re talking about high-quality bonds or junk), range from “risky with fair return” to “safe but with weak returns.”
Are high-risk and low-return investments really what you want?
Alternative investments, which aren’t the stock market, have been helping people build wealth for many decades before the financial planning industry was even born.
I don’t want to be asked by clients why they have lost their money. This is why I only recommend assets that I believe offer protection against loss of principal and non-correlated investments which don’t rise or fall with the stock markets.
Here are some of my favorite investments that are not correlated to stock markets.
In our opinion these are some of the best investment strategies that have produced healthy single-digit and low double-digit returns for clients, without the rollercoaster ride of stocks.
1. Life Settlements
An excellent investment in growth that is not correlated with stocks
Life settlements offer investors the opportunity to take part in the secondary market for life policies and provide excellent asset growth.
Life insurance policies, and the assets that they hold, can be sold and bought on the secondary market in the same way as real estate trust deeds.
Since 1911, when the Supreme Court ruled that life insurance is private property and can be sold or assigned to others at the owner’s will, it has been considered an asset.
Life settlements are life insurance policies that purchase policies that are no longer needed, not necessary, or affordable for elderly policyholders.
They are a win-win situation.
A policy owner nearing the end of their life expectancy can convert a death benefit to a living benefit that they can use immediately.
Investors can buy an asset with a certain future value. This is in contrast to growing an asset that has an uncertain future value.
While most investors may not have heard of life settlements they are used in institutional investment for many decades. Life settlements are becoming more popular for several reasons.
- Returns do not correlate with interest rates, stock prices, housing prices, political events or any other outside influences.
- There is very little downside risk. Life settlements rely on actuarial mathematics, not stock market speculation. Losses are rare because policies are bought at a discount, and future premiums costs are included.
- You are in good company. Sources such as TheDeal.com confirm that Bill Gates and Berkshire Hathaway have made hundreds of millions in life settlement portfolios.
- High Security. Life Insurance companies are some of the most trusted financial institutions. For life settlements, only seasoned policies can be purchased. Death benefits are always payable when it is due.
The private equity funds which hold life settlements were previously only available to institutional investors.
It is crucial to fully understand the process and determine who it is suitable for. Life settlements cannot be liquidized and the return rate and investment timeframe are subject to change.
The minimum required best investment strategies for our life settlement partners is $100,000. Money is usually invested for 7-10 Years.
2. Commercial Bridge loans:
Our top investment for cash flow
Investors looking for steady, steady income can consider bridge loans for commercial or investment property. Bridge loans enable investors to capitalize on real estate without having to be a landlord.
Bridge loans are also known as “hard money loans“, but they can also be “rehab loans” sometimes. They provide temporary financing, typically 6 months to 3 year at higher interest rates.
Because it is becoming more difficult for people with poor credit to get financing, real estate investors are keen to secure higher-interest loans from private lenders.
Bridge loans are short-term loans that are granted to investors or business owners who have the ability to repay, and occasionally lease-to-own their homes.
You can earn reliable monthly income by investing in carefully screened bridge and commercial mortgage loans.
Private lenders for bridge loans offer many benefits that are worth considering for anyone with income needs.
Bridge Loan benifits
- Reliable. Monthly income payments can come directly from the company that originated the loan, and not from the borrower. Sometimes, the company that sources and service the mortgages may even have a secondary interest in your best interests.
- Secure: Assets can be backed by real-world assets. Often, these assets are secured by trust deeds in the first position. The loan-to-value ratio is usually lower than 65% to allow for market fluctuations. Experienced professionals value properties and borrowers are also screened.
- Low Risk: Private investment mortgage funds can generate income for many years. However, the underlying notes are usually held for one year to reduce risk in the case of a market crash. Foreclosures are a case in which properties are sold to recover investor equity.
- High Returns: Private investors (investors) who work with us usually earn between 7% and 10% depending on whether you are accredited and the current situation that is “fit”.
- Flexible: Loan notes and funds can be stored in a Roth IRA self-directed for tax-free income. This is either in your IRA or in you pocket, if your age exceeds 59-1/2. For continued cash flow, funds can be rolled over to new loans.
Bridge loans have some drawbacks. It can be difficult to find and manage your own loans and it can be challenging to work with other lenders. Not all lenders follow industry best practices, which will protect your principal.
We ask lots of questions to our providers and choose who we refer! )
4 More of the Best Investment Strategies to Invest Besides the Stock Market
1. Direct Real Estate Investments
Renting cash-flowing properties is a proven way to build wealth. Although it can be tedious, being a landlord is rewarding. Here are some basics:
- Start small
- Calculate the numbers, focusing on cash flow, and not speculation on or counting on appreciation.
- Get great help and advice from a real-estate attorney to a great handyman.
- Always have enough cash for the unexpected. (See #4 below.)
2. Fractional Real Estate Investing
Accredited investors can invest directly in commercial real property by becoming private lenders on commercial projects. These loans are typically cash-flowing apartment blocks.
These investments provide qualified investors with cash flow and equity. They also help real estate investors avoid some of the most costly (and commonest) mistakes.
Real estate investors make mistakes when investing in real estate. They limit themselves to properties within their immediate area, don’t evaluate enough properties before buying, do not accurately forecast future costs, or manage the properties efficiently.
3. Peer Lending
Peer to peer lending is also known as “peer-to-peer lending” or “P2P”. It cuts out the middleman, the banks and credit card firms. People can lend online through websites like Prosper.com as well as LendingClub.com.
Peer lending is a great way to get started investing. You can invest as little as $100. You should have at least 10-20 loans in your portfolio, as $25 per loan.
The returns are usually in the low single digits to mid-double digits. People who actively choose loans do better than those who let their portfolios be random.
4. Life Insurance with High Cash Value
Although life insurance is not considered an investment, it can be used to store cash and provide permanent protection for your family.
In recent years, life insurance has been a popular asset that banks have purchased as part of their Tier One assets. It is now known as BOLI (bank-owned life insurance).
When one or more of these are true, whole life policies that maximize cash value can be very attractive.
- Long-term savings is what you want. To build equity and liquidity in long-term savings vehicles that can keep up with inflation.
- Liquidity is important to you. You need the ability to borrow from your savings temporarily for major expenses, emergency situations, or lucrative opportunities.
- Increasing life insurance protection is desirable. Since death benefits are permanent and increase with time, it’s a good idea for families with term life insurance to replace their term policies with permanent whole-life policies when they can.
- Multigenerational wealth is valuable.
Quick Resourse on Cash Value Life Insurance
My short video called 10 Minute Lesson On Life Insurance is a great primer about how whole life insurance can work as a foundation for broader wealth-building strategies.
You now know the best ways to save money and invest using other investments.
Are you ready to make a move to find your best investment strategies beyond the stock exchange?
Verdeo Financial helps create wealth without Wall Street and the big banks. We help people learn new ways to invest, and we educate them about how to save, grow assets, and reduce risk… by investing beyond the stock market.
Our specialty is diversification outside of the stock exchange with other savings and investment vehicles. For any questions or assistance in deciding which option is best for you, please contact us.