Here at DiversyFund we are all about helping our investors grasp a better understanding of diversification in the 21st century. This is why we have explained, below, the pros and cons of investing in only one asset versus diversifying. Understand the Importance of Diversification Let’s start by saying that putting all of your investment eggs in one basket goes far beyond the boundaries of the Modern Portfolio Theory (MPT). One of MPT’s key insights is that while investors need to be compensated for bearing risk, not all risks are rewarded. The market does not reward risks that can be “diversified away” by holding a bundle of investments, instead of a single investment. By recognizing that not all risks are rewarded, MPT helps to establish the idea that a diversified portfolio can help investors. Additionally, it can help investors earn a higher return for the same amount of risk. Understand the […]

As you delve deeper into real estate investing, you begin to weigh the pros and cons for your investments. You hear terminologies such as debt, mezzanine, and equity in conversations, but do you know what they mean? If you do not already know what these entail, you are not alone. This blog post will break down each investment type and their differences in basic terms. That way you can decide which investment fits your criteria when you are ready to invest.  Debt Investing This is simply when you provide a loan to an operator backed by an asset such as real estate. As an investor, you will receive either fixed or amortized payments. That is, you either receive interest only or interest plus a portion of your principal for your scheduled monthly payments, also known as a mortgage that you may have taken out on your own residence. You will have […]

Real Estate Investing can take many forms, all of which continue to cross over into one another as real estate investing continues to evolve. If you are looking for a basic distinction, we can begin by discussing the difference between an active passive investor. Use this quick and useful summary to determine which type of investor you are. Active Investors. The primary purpose of active investing is to outperform the market. In order to do this the investor must continuously monitor his or her investments to exploit market inefficiencies. This type of investing is very involved, but consistent success is rare, especially for an individual investor. The benefit of active investing is the potential to make higher than average returns. The risk is mainly the difficulty and rarity in achieving this, especially on your own. Essential Daily Demands: Active listing research online, studying the markets and/or zip codes you would like […]