There are plenty of options when it comes to investing. But what investments hold their value and stability the best? We spoke with a. few experts to find out what they had to say. See their suggestions below!
Real Estate is One Option
Faruq Darcuiel, founding partner at Acropolis Developments, says:
“I’m sure everyone has thought of housing as a primary investment asset but even in a declining market, there are several reasons real estate can add stability and versatility to your portfolio.
First off, housing price appreciation is a virtual guarantee if you are willing to hold for 5-10 years.
Even if you bought at the peak before the 2008 crash, you would have recouped your initial investment by 2015 (on average).
Even looking now as prices are finally beginning to fall, the rate of decrease is far lower than most other popular asset classes during the “COVID bull market.
Part of that is due to the fact that rates have affected affordability not so much demand. While this isn’t good for prices in the short term it speaks to the overall stability and desirability of real estate. Real estate is a physical asset that people need.
The infinite demand for shelter means the real estate will always have demand. This also means your real estate holdings have very real versatility that can provide you immediate value in the short term.
For example, owning rentals (if managed well) can put cash in your pocket immediately while also building your equity.
Other options like Cash-Out Refinances or HELOC compliment a robust array of tax benefits that are simply not options with other investment strategies.
It makes sense why real estate is a key part of any diversified investment portfolio.”
Cash Flow is Key
Steve Davis, CEO of Total Wealth Academy, says:
“I know of no asset class that does not go up and down in value over time. Stocks have crashed 18 times in the last 100 years but they have also recovered 18 times. Unfortunately, it’s a fact of life.
However, this is a speculator’s question, meaning it is someone who believes in order to make money you “buy low to sell high.” This is a form of gambling since there is no guarantee that asset will increase in value over time.
I am a real estate investor, not a speculator. I buy for cash flow.
Does real estate increase and decrease like every other asset? Yes, but guess what? The cash flow will always remain the same. If you want to add stability to your portfolio, stop gambling and start investing in real estate.
In 2007, I invested in about 4000 apartment units. Let’s say I was making around $80,000 a month in passive income, then the crash came. The great recession hit and my property values dropped by over 25%.
Did I care? No, my cash flow was still $80,000 a month, regardless of the property’s value. That encapsulates true stability in the market.
To worry about the ups and downs is unnecessary since you have absolutely no control over it. It is going to happen. The best piece of advice is to make sure you are not just gambling on stocks and investments, make sure you are investing for stable cash flow.”
REITS Can Do Well
Sasha Quail, business development manager of claims.co.uk, tells us:
“As the real estate market does not immediately connect with either, it is an excellent strategy to diversify a portfolio anchored by financial assets such as equities and bonds.
This can enable you to take on less total risk while generating larger rewards.
A mutual fund with real estate interests is similar to a real estate investment trust, or REIT.
For a little investment, this enables individual investors to have stakes in great real estate ventures across the nation or even the globe.”
A Diversified Portfolio
Maja Talevska from ReviewLads.uk says:
“Having a diversified portfolio is the best way to achieve stable growth. Invest in 60% stocks and 40% assets that hold their value to stabilize your portfolio and achieve moderate growth.
Property, CDs, Treasury Bills, and gold top the list of stable investments. Index funds or Exchange Traded Funds are excellent options to spread the risk and stabilize your portfolio.
Blue chip preference shares can offer the possibility for growth and stability with minimal risk.
Newer investments, like NFTs, offer exciting possibilities for smoothing out the crypto rollercoaster ride, but finding the right option will take some doing.
Tokenized property investments also provide interesting opportunities, but again, the key is in choosing the right options.”
Bonds and Commodities Can Fare Well
Shaun Martin, Founder & CEO of We Buy Houses in Denver, tells us:
“1-Real Estate Investment Trusts (REITs)
Real estate investment trusts, or REITs, are another type of investment that can hold its value and add stability to a portfolio.
REITs are companies that own and manage income-producing real estate, such as office buildings, shopping malls, and apartment complexes. REITs tend to be less volatile than the stock market, and they can provide a steady stream of income.
Commodities are another type of investment that can hold its value and add stability to a portfolio. Commodities are physical goods that are used in the production of other goods or services, such as oil, gold, and copper. Commodities tend to be less volatile than stocks and can provide a hedge against inflation.
3- Treasury Bonds
Treasury bonds are one of the most common and well-known types of investments that can hold their value and add stability to a portfolio.
Treasury bonds are backed by the full faith and credit of the United States government, making them a very safe investment. Because they are so safe, they tend to have relatively low-interest rates compared to other types of investments.
4- Municipal Bonds
Municipal bonds are another type of investment that can hold its value and add stability to a portfolio. Municipal bonds are issued by state and local governments, and they are typically used to finance infrastructure projects such as roads, bridges, and schools.
Like Treasury bonds, municipal bonds are backed by the full faith and credit of the issuing government, making them a very safe investment. Municipal bonds tend to have lower interest rates than other types of investments, but they may be subject to state and local taxes.
5- Corporate Bonds
Corporate bonds are another type of investment that can hold its value and add stability to a portfolio. Corporate bonds are issued by companies in order to raise capital for their businesses.
Because they are not backed by the full faith and credit of the United States government, corporate bonds tend to have higher interest rates than Treasury or municipal bonds.
However, corporate bonds can still be a very safe investment if the company issuing the bond is financially sound.”
Holly Cooper, Content Manager & Planner at LUCAS PRODUCTS & SERVICES, explains:
“To purchase stocks, bonds, or other assets, a mutual fund collects money from investors. Mutual funds provide investors with an affordable opportunity to diversify, distributing their money over a variety of investments to protect themselves against the losses of any one investment.
Mutual funds are an easy method to access the higher investing returns of the stock market if you’re saving for retirement or another long-term objective without having to own and maintain a portfolio of individual equities.
Some funds restrict the kind of businesses they can invest in those that meet specific requirements, such as biotech companies in the technology sector or businesses with strong dividend yields. This enables you to concentrate on certain investing areas.
How to purchase mutual funds:
Direct purchases of mutual funds can be made via the organizations in charge of managing them as well as through cheap brokerage houses.
Nearly all of the mutual fund companies we assess provide no-transaction-fee mutual funds (i.e., commission-free) along with tools to assist you in selecting funds.
Be aware that most mutual funds need a minimum initial commitment of $500 or more, however, some companies may reduce the requirement if you agree to set up recurring monthly contributions.”
Diversifying is Key
James Crawford, Co-founder of Deal Drop, tells us:
“Diversity is the key, this is the number one strategy to grow and regarding the investment that holds its value there are many; for example, real estate investment trusts can increase.”
Final Words: What Investments Hold Their Value and Stability?
There are a few different investments our experts find to hold both their stability and value. The most popular appear to be real estate investments, bonds, and mutual funds.
No matter what you decide to invest in, it is always important to check with a qualified advisor before making any major decisions that could seriously affect your wealth.