Investment Portfolios Where Can You Invest Your Capital For Long Term Growth?

By: James Woolley

In this day and age many people like to run their own investment portfolio rather than pay a fund manager to do it for them. This is hardly surprising with so many so-called experts losing money in recent years. However the point I want to make for anyone going down this route is that you do not have to invest in shares alone.

Of course you may be bullish about the stock market and think that the stock market will give you the greatest gains, but it still pays to invest in a few safer investments, like bonds for instance. Bonds are not without their risk, but if you buy them at a reasonable price, they can give you a decent income for many years to come in the form of interest payments.

Many investors fill their portfolios with stocks, but the more advanced investors will also balance their portfolio with a few bonds as well in order to give them a regular income stream. They are also seen as something of a safe-haven investment should the stock market fall.

However you do have other options available to you when running your own investment portfolio. In this modern era you can invest in a whole range of different markets in the form of ETFs (Exchange Traded Funds), for instance.

So if the price of crude oil suddenly fell to $60 per barrel, for example, and you felt that it was highly likely to return to at least $70 or $80 in future years, then you could invest in a crude oil ETF (which tracks the price of crude oil) in order to capitalise on this prediction. Similarly you can also invest in any other commodity that looks undervalued in the same way, because they all have their own ETFs.

If you feel that you do not have enough knowledge about commodities to start trading them, then you could simply trade ETFs or tracker funds that are linked to the stock market instead. For example if the FTSE 100 fell to 5000 and you thought that it was likely to rise back up to 5500 or 6000 in the coming months, then you could invest in a FTSE 100 tracker fund. That way you can gain exposure to the market without having to invest in individual shares.

So the point I want to make is that there are many different instruments you can invest in nowadays. Many people invest all of their investment capital into shares, but the smart investors will invest in a whole range of other markets in order to both build and protect their capital.

Article Source: http://yourfinance.co.za

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