Portfolio Management: What You Need to Know

Portfolio Management: What You Need to Know

Did you know that 53% of all U.S. families owned publicly traded stock in 2019? This percentage was up from 32% in 1989.

When people think of investing, they likely have stocks at the top of their minds. Yet, there are other forms of investing that can diversify a portfolio.

Want to know more about investment portfolio management? Read this article to find out.

What Is Portfolio Management?

Portfolio management is the process of creating and maintaining investments. You can manage your own investment accounts or hire a portfolio manager to do it for you. Investment advisors also manage portfolios.

The portfolio includes a person's entire financial asset collection. Portfolios can include any of the following:

A portfolio includes all of the investments you have, whether they are housed in a single account or not.

How to Manage a Portfolio

If you choose to manage an investment portfolio on your own, you'll need to know a few main things.

First, set goals that will help you choose an investment strategy and account type.

The goal is to make money, but what do you want to make money for? Some investors invest for retirement, their child's education, or home renovations.

Create a timeline for the money you are investing. When do you need to make a profit? If your date is flexible, you can use a conservative investment strategy.

Most importantly, you'll want to determine your risk tolerance. Your willingness to accept risk is a key driver in how much you diversify your portfolio.

Should You Add Real Estate to Your Portfolio?

It's important for investors to diversify their investments instead of putting all of their eggs in one basket.

However, some investors see real estate as a scary investment opportunity. In actuality, real estate investments are less risky than stocks, bonds, crypto, etc.

Real estate properties tend to increase in value over time. With a great investment, you can make money through rental income and even sell the property for profit when the time is right.

The stock market ebbs and flows. If you invest all your money in stocks, you could be left with zero dollars at the end of it all. Real estate may depreciate at some points, but it always goes back up.

Here are some of the other benefits of adding real estate to your investment portfolio:

  • Improved cash flow
  • Tax breaks and deductions
  • Builds equity and wealth
  • Real estate leverage
  • Inflation hedge

If you want to invest in real estate without being too involved in the owning and management processes, consider a real estate investment trust (REIT). You can buy and sell REITs on stock exchanges.

You can also buy properties and hire rental property management companies that can handle ownership tasks for you.

Hire Rental Property Management

Portfolio management is a task that all investors need to take into consideration. If you plan to add real estate to your investment portfolio, consider hiring rental property management services.

Contact us today to learn more about what we can do for you.