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Contrarian Investments for Savvy Individuals

Many traders and investors blindly assume that there is only one way to dabble in the financial markets: conventional stocks trading. Fortunately, nothing could be further from the truth. The more you learn about the financial markets, the better informed you are about your options, and there are many of them. Let’s go back to the traditional form of investing for a second and understand what benefits are available with things like stocks, commodities, indices, and currencies trading.
 

If you were to go to a land-based institutional broker, that person would charge you hefty fees and commissions to manage your finances – independently of your input. You are effectively entrusting your financial livelihood into the hands of a complete stranger. True, these people are well informed about the funds their brokerages are selling – but they’re in it for themselves, not for you. Monthly maintenance charges, hidden fees, commissions, annual expenses, and other costs await you. There are no guarantees with stocks, commodities, mutual funds, ETFs and the like.
 

Does this mean that you should avoid any risk -related investments? Absolutely not! Without the risk elements, there would be no reward to speak of. Typically, financial portfolios are made up of a mix of domestic and international stocks, cash, bonds, immovable property and the like. The more diversified your financial portfolio, the less overall risk you assume. The precise ratios of each component in your financial portfolio will vary according to the financial advisor in question. However, conventional wisdom states your risk profile determines your mix of assets. A balanced portfolio is one where the investor reduces volatility by including stable financial assets in the portfolio.

 

 · What mix of stocks and bonds is best?

 

Balanced portfolios allow for growth and accommodate short-term price movements, with an eye to long-term gains. The precise mix of this type of portfolio is 60% bonds and 40% stocks. According to leading investment enterprises, your average annual return on such a portfolio can be around 7.8%. As you increase the stock component of your portfolio, so you increase the volatility of your profile. Remember that stocks typically generate substantially more than bonds, so your returns are going to be greater with a stock-heavy profile – provided you can tolerate the risk. The worst year in the history of stocks was 1931 – the height of the Wall Street crash and the global depression that followed.
 

Growth-oriented financial portfolios are ones that are heavily slanted in favour of stocks, with a minimal allocation to bonds. Recall that bonds generate fixed-interest payments and include things like Treasury Notes (2 years, 5 years, 10 years, 20 years, etc.). If you were completely risk-seeking, you may opt for a financial portfolio that is 100% based on stocks. Your best bet as an investor would be stocks, provided you could whether the storms along the way. There are many other ways to rebalance your financial portfolio, or incorporate additional forms of investment.

 

 · Growth-oriented strategies to boost your financial portfolio

 

Richard P. Horton, a Lionexo trading options expert believes that traders will find tremendous benefit in alternative investment options. ‘I’ve seen many traders asking for ways to diversify their financial portfolios. These include speculative trades on stocks, commodities, indices, and currency pairs without actually owning the underlying assets. By forecasting future price movements, you can turn over vast sums of money in next to no time at all, generating significantly more profitability in the process. When you wait for stocks to appreciate, you’re tying up all your available resources in individual trades. This is inherently risky, and is especially detrimental when cash is required. Short-term trades ensure liquidity, and substantial profits can be generated on in-the-money outcomes.’
 





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