Investing is a great way to increase your long-term wealth, prepare for retirement. Some people also invest to beat inflation.
In the US, the federal reserve manipulates the money supply and interest rates to control inflation, but it still occurs over time.
As inflation goes up, the value of the dollar goes down, so if you’re saving you money in a jar or in a bank account that only gives you two to three percent interest and refusing to invest in something that keeps pace with inflation, you’re actually losing money in the long run.
The fact is, investing can be risky, but it’s also important.
You need a well-rounded portfolio, and to do that, you need to invest in more than traditional stocks and bonds.
Check out these unconventional investment options — all of which should be a part of your investment portfolio in small percentages.
Gold and Silver
You can purchase gold and silver in bars, rounds, and coins from places such as Treasury Vault — and you should. While gold and silver shouldn’t be a huge part of your overall portfolio, they are an important investment. Gold and silver hold their value over time, even when the value of the US dollar fluctuates.
Historically, when the value of the US dollar falls, the value of silver and gold increases, sometimes drastically. For example, between 1998 and 2008, when the US dollar’s value was low, the value of gold and silver nearly tripled.
Additionally, gold is a good option if you’re looking for an investment that offset inflation because its price tends to rise as the cost of living increases. Even during The Great Depression in the 1930s, the relative purchasing power of gold continued to rise, while other prices dropped sharply.
Cryptocurrency is a digital currency that’s managed through advanced encryption techniques. The currency is created through a process called mining, which requires computers to solve complex algorithms.
It’s possible to create approximately 25 Bitcoins every 10 minutes, and the creation process will cap out at 21 million coins, which is expected to happen in 2140. There are also several other types of cryptocurrency to watch, including Litecoin, Ripple, and MintChip.
Keep in mind, the cryptocurrency market is a volatile one. If you can’t handle drastic ups and downs, investing in cryptocurrency probably isn’t the best option for you. However, if you pay close attention in the market, and are lucky enough to buy in during a downslide your investment could pay off greatly.
The key to succeeding is to buy low, wait for the prices to increase, then sell enough to pull your original investment out. That way, if you do end up losing it all, you’re only losing the money you made, not your original investment.
Also, keep in mind, the cryptocurrency market is a lot more stable than it was 10 years ago, so while it’s a more risky investment, it’s not one you should avoid completely. Just invest in small amounts — that you can afford to lose — until you get the hang of the market’s ups and downs.
Many people consider it risky to invest in foreign currency, but historically foreign currency trend with less volatility than many stocks. The currency market lets you select currencies based on how you perceive their future value. For example, many people invest in Iraqi Dinar, Vietnamese Dong, and Turkish Lira because they believe the value of it will continue to rise with time.
Of course, there’s no way to predict these things accurately. Buying foreign currency requires you know and understand what’s going on in the world at any given time, so it’s a process that’s typically best left to a professional investor. When looking for someone to help you manage your investment portfolio, make sure the person you choose is knowledgeable in the world economy and news.
When it comes to investments, diversity is the key to success. There’s always a risk — some high, some low. So take the time to do your research, hire an experienced investment broker, and track your portfolio regularly to succeed.