The "best investments" for an investment portfolio can and should vary by investor. In other words, "one size does not fit all". This is because each of us has a unique "investment personality" that is a derived from of our upbringing, investing experience, job history, economic climate, and many other influencing factors. All of these factors contribute to and mold each investor's tolerance for risk, level of involvement in decision making and inclination to venture outside of their comfort zone when making investment decisions.
Therefore, the best investments for me will probably not be the same as the best investments for you. However, there are some ways to help you narrow your choices and find the investments that fit your unique "investment personality".
Later on, I am going to serve up what I believe are the overall safest and best investments today for the short-term investor and the mid-long term investor. Both are "passive investments". You can decide if these are right for you.
Step 1) SELF-ASSESSMENT:
The first step towards finding the best investments for you is to get a good handle on your investment personality. Do you really know yourself as well as you think?
* What is your tolerance for risk?
* How involved do you want to be in your investment portfolio decisions?
* Are you willing to consider investment alternatives that you aren't currently familiar with?
To help you with this, here is a simple tool to help you with this that I call the "1-Minute Investment Personality Calculator". This will ask you questions and then calculate where you fall on a scale ranging from Conservative to Aggressive.
Step 2) EVALUATE YOUR GOALS:
The next thing to help determine the best investments for your portfolio is to reconsider your goals. Start with the big picture.
* When do you want to retire?
* What lifestyle do you want to lead for the rest of your life?
* Where do you want to spend your retirement life?
* How big of a nest egg do you need for financial security: emergencies, inflation, family assistance, etc?
And so on....
NOTE: It is very important to be clear on your future goals. Write them down. Keep them close and update them as life happens.
Your sub-conscious brain will work behind the scenes to help you achieve your goals. But you have to point it in the right direction.
Step 3) QUANTIFY YOUR GOALS
Now, ask yourself if you can afford the lifestyle that your newly defined goals will require. How confident are you that your current investment portfolio will support the goals you have defined?
To assist you with this, I have supplied a link to the "AARP's Retirement Calculator".
This is going to help you with two things:
a. It will help determine how much money you'll need to achieve your goals.
b. By comparing how much money you'll need with what you have in your investment portfolio, you will be able to determine if there is a "financial gap" between those two amounts.
If there is a financial gap (and for the majority of us, there usually is), then you have two options:
1. You can revise your goals more conservatively.
2. You can revise your investment portfolio to close the "financial gap".
Assuming that you will choose Option 2, you will need to ask yourself:
"What are the best investments that I can include in my portfolio to close the financial gap and accomplish my goals?"
Step 4) FIND THE BEST INVESTMENTS TO CLOSE ANY FINANCIAL GAP:
So how do you find the best investments for your portfolio based upon:
* Your investment personality?
* The financial gap between your goals and what your current portfolio can provide?
To answer this & find the best investments for your portfolio, we need to review history:
Real estate, in its various forms, has created more wealth than any other type of investment. However, many folks today cringe when they think of investing in real estate because of the recent sub-prime debacle and rampant foreclosures. Meanwhile, many of these same people continue to hold on to their stocks that have declined 40-50% in value in the current economy!
Unlike stocks, which can become worthless, real estate always will retain a certain amount of intrinsic value.
Now ask yourself this question: "Is this a real estate buyer's market or a seller's market?" That's right! It is definitely a BUYER'S MARKET for real estate.
Property values have declined significantly in virtually all real estate forms (raw land land development, residential, commercial, etc.) As a result, sellers are willing to entertain most offers.
This presents an extraordinary opportunity for investors with:
* Money to invest
* Knowledge of how and where to invest
Now, back to history: savvy investors understand that economies are "cyclical". Eventually, recoveries follow recessions. Real estate values and stocks will rebound.
The $10,000 Question is:
"Where should you invest your hard-earned dollars to help you close the financial gap in your investment portfolio?"
My money says REAL ESTATE! And I'm NOT even a real estate broker!
Step 5) INVEST IN FORECLOSURE PROPERTIES & REO PROPERTIES RIGHT NOW:
As noted above, I believe the best investments today and in the future will continue to be specific real estate products. (Recognizing that this is a broad statement, you will have to determine how this fits with your investment personality.)
For the next 2-3 years, I absolutely believe that foreclosure properties and bank-owned REO properties are the best investments available today. And I mean across ALL investment types including stocks, bonds, precious metals, etc.
Many people reading this will say: "I'm no real estate expert and never will be, so foreclosure property investment isn't for me." The great news is that you don't have to be a real estate expert to take advantage of this opportunity! Please read on.....
As foreclosures have become an enormous industry, exciting new companies have emerged to take advantage of this extraordinary wealth-building opportunity. These new firms are called: "REO Companies".
REO companies buy foreclosure properties in large quantities from the banks and other lenders. They rehab these homes to "move-in" condition then resell them quickly and at a profit for their investors. And the returns on investment can be staggering!
The best part is that the REO companies do all of the work for you! It's truly PASSIVE INCOME.
Recall from Step 3 above we said you have two options if there is a financial gap between your goals and what your current investment portfolio can provide. And, we assumed that you would choose to reevaluate your investments and make some changes versus choosing to live a less expensive lifestyle.
My recommendation is that you consider investing in foreclosure properties and REO properties in some way. Either do this on your own or by investing with a professional REO company. Personally, I choose to invest with an REO company and leverage their expertise as a "silent partner". Here is a link explaining how this works: "Why You Should Invest in REO Companies"
Step 6) INVEST IN RAW LAND DEVELOPMENT FOR THE MID-LONG TERM:
The best investments for the mid-to-longer term (2+ years out), in this author's opinion are raw land development investments. Here is a link to learn more about these investments: "4 Fact Based Reasons Why Raw Land Development Is A Great Investment".
Once again, you may feel, at first blush, that this is outside of your comfort zone or expertise. And my response is - it needs to be! If your current portfolio isn't going to achieve your goals, you need to consider alternatives that can! As the old saying goes: "If you keep on doin' what you've always done, you're gonna keep on gettin' what you've always got." In other words, to find the best investments to help you close your financial gap, you may need to consider new ones.
As with investing in foreclosure properties and REO properties, you don't need to be an expert. Similar to investing with REO companies, you can invest with professional land developers in raw land developments, letting the experts do what they do and share in the profits as a silent partner. (Passive income!)
I've already said that real estate has created more wealth than any other investment type. Furthermore, the forms of real estate that I have recommended are the most profitable and overall best investments within the real estate industry -- in others words, the best of the best!
* Foreclosure properties and REO properties
* Raw land development investments
Step 7) FIND THE RIGHT REO COMPANIES TO INVEST WITH:
Finally, if you would like recommendations on how and where to invest in these "best investments", contact me - it's FREE advice! Just click on this link and fill out my contact form with any questions you may have.
I'll be happy to tell you where I invest and how it works.
Foreclosure Property Investment
What are the Best Investments you can Make Today?
John Hanlin is an Independent Investment Consultant specializing in high yield, low risk investments secured by real estate and is a seasoned investor of over 25 years. John is the owner of the investors' website www.JohnHanlin.com & author of "The LazyMan's Guide to Understanding Foreclosures & REO Property Investment" (available at www.LazymanCompany.com)
Disclosure: John Hanlin is an active investor in foreclosures, reo companies and land development investments.