Business advisors on radio, television and in newspapers always seem to suggest that we keep our savings in a balanced portfolio.  The number one recommendation is nearly always to invest in mutual funds.

 
By themselves, though, mutual funds may not provide all the balance that you could have.  Most mutual funds are invested in equities (stocks), bonds or both.  But there is more to the financial world than just those two alternatives!

 
Real Estate Investment Trusts (REITs) work much like a mutual fund in that your money is spread among various ventures, so if one investment fails, your losses will be limited.  They offer less risk than, say, investing all your real estate funds into one shopping center or apartment complex.  Of course, with that reduced risk come lower potential returns.  Some REITs specialize in commercial property while others focus on residential real estate.

 
There is an allure for some of us to invest directly in certain stocks.  Careful selection of those can help build diversity into your portfolio.  There’s probably not much sense in investing directly into the same companies that your mutual funds own.  To invest in the stock market, you’ll need to open an account with a brokerage firm, but there are many to choose from.

 
IF you know what you’re doing, you might want to put some of your savings into something that you can actually hold in your hands (or your attic or safe-deposit box).  With this approach, you definitely need to know the market.  Don’t invest in antiques (for example) unless you thoroughly understand the market for the types of antiques that are your specialty.  Understand that what is popular today may not be popular in the future.  (I have a large collection of beanie babies that remind me of that on a daily basis.)  You also need to think about where you’re going to store your antiques (or art, gold, beanie babies, etc.).  Will you be able to keep them safe from theft, fire, earthquake or flood?  Will the costs of your additional insurance eventually eat up whatever increase in value those items might experience?

 
Currency trading offers an opportunity for some excitement, profit or loss.  Currencies of various nations fluctuate constantly when compared to the currencies of other countries.  Usually the changes in value are relatively minor, but if you hold enough of a rising currency, there is money to be made by selling it at the right moment.

 
All of these options, and others, require the patience to become educated.  If you’re not willing to take the time to learn about them, you’re best off sticking to the more traditional routes of diversification and let the experts do your investing for you!  A good place to start is right here—on the Internet!  Follow the links that you see pop up on your screen from time to time.  Investment companies know they have to teach you about their products before you buy, and they often use the Web for educational purposes.

Greg Porter is a university professor, Internet entrepreneur and owner of gSport Enterprises LLC.  Among his web enterprises are www.InformationWarehouse.Info and www.web-hotdeal.com.

Copyright 2006