5 Ways To Protect Your Portfolio From Market Volatility
The spread of COVID-19 has caused the markets to drop significantly, and there are reasons to believe that this could be a long-term problem. Here are 5 things you can do to protect your portfolio during times of extreme market volatility.
1. Prepare In Advance For A Stock Market Crash
Market downturns are a regular part of the economic cycle and being proactive is better than reacting the moment news gets bad. Creating an appropriate portfolio mix for one’s age, time horizon and risk tolerance can set investors up to handle the next stock crash.
Most financial experts will tell you that diversification is key to increasing your odds for investment success. It will help you protect your portfolio in the event that one particular portion of the market underperforms.
3. Non-Correlating Assets
Non-correlating assets are assets that don’t go up and down in tandem with the stock market. Diversifying into non-correlated assets like real estate or commodities will potentially allow you to reduce the highs and lows and provide more balanced returns.
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4. Multiple Time Frames
Even if you believe that financial markets will always overcome these kinds of events, and so far they have, most investors still have to look both short-term and long-term. A combination of long-term and short-term investing allows you to focus on the parts of your portfolio that need the most attention in volatile times and realize that some parts are ok to leave in place.
5. Consider Alternatives
Alternative investments offer the potential for at least some of your assets to stay put when the markets drop. Fortunately, there are other alternative investments that act as hedges in a diverse investment portfolio while at the same time appreciating in value.
Over the 25-year period from 1992 through 2017, multifamily real estate provided the highest average annual total returns of any commercial real estate sector with the second-lowest level of volatility, according to research cited in a 2018 report by CBRE.
The DiversyFund Growth REIT
At DiversyFund, we bring investors the unique opportunity to add commercial real estate to their portfolios. We do this through our Growth REIT fund. With one investment, you are diversified across a dynamic portfolio of properties. For all the benefits alternative REIT investments have to offer, click below.
PROTECT YOUR PORTFOLIO WITH ALTERNATIVES
Invest In Commercial Multifamily Real Estate
Here's How It Works
Step 1: Make Your Initial Investment
With a Growth REIT investment made on our online portal, you will own a portfolio of multifamily apartment buildings.
Step 2: Set It And Leave It
Our seasoned team will source, renovate, and sell properties on behalf of investors in the fund–and you’ll get updates throughout the entire process.
Step 3: Track Your Growth
As an investor, you will profit from rents collected on properties, and you will profit at the end of the investment term when the fund’s properties are sold.