Most investors know that a diversified portfolio spreads your risk and keeps your returns afloat if one of your investments goes down. The question then becomes: where are the best places to invest your money?
While the stock market offers many options for diversification, it is wise to look beyond Wall Street and find other investment vehicles with solid return potential. We asked members of Forbes Financial Council to share their thoughts on the best stocks to add to your portfolio. From cryptocurrency to health savings accounts, here’s what they had to say.
1. Life insurance
Life insurance is more than estate planning. Think of it as a vehicle that allows you to invest in a product that will secure your inheritance while providing you with tax-free income in retirement, if properly structured. – Manuel Vidal, Premium financing group
2. Self-directed IRAs
Self-directed IRAs are a little-known investment strategy once reserved for the very wealthy. The account owner chooses to make alternative asset purchases within the account, usually from investments that they know and understand. Permitted investments include real estate, partnerships, limited liability companies, hedge funds, precious metals and more: anything not prohibited as defined by the IRS. – Jaime Raskulinecz, Next Generation Trust Company
3. Online businesses
It’s easy to get tripped up in the ticker tape. Rather than chasing the ups (and downs) of the market, it’s better to invest your money in something over which you have more control. Consider buying a proven online business that shows steady growth and requires minimal owner involvement. It can be more rewarding both financially and personally. – Ishmael Wrixen, FE International
Even the most successful hedge fund managers still cap aggressive portfolios at one percent of total holdings. BTC, ETH, and LTC seem to be the three most popular cryptocurrencies right now, if you are looking to gamble in the space. –Matthew May, Acuity
5. Real estate investment trusts
REITs can add an extra layer of diversification to your portfolio and bring the benefits of increased return and decreased risk. While overlooked, they tend not to correlate with stocks, so when part of your portfolio is going down, they can be going up – and vice versa. It’s also a liquid way to get into real estate without swallowing your fortune in a house. –She Kaplan, LexION Capital
6. 401 (k) account
A 401 (k) is an often overlooked place to save and invest for your future. Many employers provide them anyway, so using your 401 (k) account won’t cost you more, and if your employer has a matchmaking program, it’s really a no-brainer. No matter how close to retirement you are, renew the pledge to maximize your 401 (k) in the New Year and watch your savings pile up. – Shane Hurley, RedFynn Technologies
7. Health savings account
If you’ve maximized your retirement contributions and are looking for other tax-efficient investment vehicles to save for retirement, consider funding your health savings account, if your business offers one. Contributions are not taxable and all funds used for medical purposes are tax exempt. Second, you may be able to invest the funds and use them as a secondary retirement account. – Alexandre koury, Quest for values