If you are an investor in the stock market, you must be aware that analysts believe the United States’ stock market is overvalued, and due for a correction. At this point in time, it would be wise for you to carefully review your investing portfolio and sell investments in the stock market that pose unnecessary risk to your financial security. This will leave you with vacancies in your investment portfolio that need to be filled, as soon as possible.
When you are looking for new investments to introduce to your financial portfolio, be mindful of your investing road map, as well as the strategy you have in place to achieve your investment goals. For example, if stock you own pays dividends, you will need an income generating asset to immediately replace it. This is particularly important if you are using investments to supplement your income.
Among the leading income producing investments in the marketplace are hard assets. This class of investment includes investing in containers, collectibles, and real estate; to name few. Investors consider these to be a much more appealing option because they are tangible assets, that can be seen and touched. For many investors, this lowers the associated risk and raises the investment’s overall appeal.
When choosing investments, there is an enormous amount of research that must be done to satisfy your questions about risk and return. At the moment, you have likely discovered that the stock market is in a precarious position, and that poses a risk to the investors – yourself included – who have investments in stock. To avoid a financial crisis when the markets correct themselves in the near future, stock market investors should move away from the perils of Wall Street and invest their money in safer investment options, with similar or greater investing rewards.
The investment community is full of investing opportunities. Some of the available investments are more appealing than others, as decided upon by an established set of risks and rewards. Based on these risks and rewards, investors will decide which options fit into their portfolio and best helps them achieve their investing goals. Regardless of the opportunity, expect that experienced investors will heavily scrutinize the benefits and dangers of each individual option.
There are a number of factors that help investment seekers determine the amount of risk associated with an investment opportunity. Some of these include the company’s brand reputation and value, as well as established performance and potential for future industry growth. If an investor is satisfied with the corporate outlook, the risk may be considered acceptable. If there are aspects that are troublesome, or are cause for worry, investors would be wise to discount and avoid those investing options.
An investment’s return on investment (ROI) plays a vital role in the investor’s portfolio performance. The investment reward is important, in that investors rely upon it to move them closer to their financial goals. Moreover, an investment’s reward is sometimes used in determining the risk of investing. When returns are high, some investors have an increased tolerance for risk. This is why options are best studied and reviewed on an individual basis.
It is undeniable the influence that risk and reward has on investment seekers’ decisions when choosing investments to add to their portfolio. By carefully following their investing road map, investors will be able to identify investments that move them forward toward building personal wealth, all the while maintaining an acceptable level of risk in their portfolio. In some instances, this will require that investors exercise self-discipline and carefully weigh risk and reward before making the decision to invest.
Three things to consider when choosing investments for your portfolio are:
- industry or sector,
- tolerance for risk, and
- rate of return.
In most instances, the information you collect researching these factors will provide answers to important questions, as well as help you make important investment decisions. Given the attention they deserve, these factors will influence your choices and give your investing strategy the direction it needs.
Industry or Sector
Based upon global and domestic economic performance, select an industry to invest in that has demonstrated prosperity and potential for future growth. For example, in times of conflict and war, defense and military-related corporations often enjoy a rise in profits. As well, the international container shipping industry – which is responsible for transporting more than ninety percent of the world’s goods – offers a number of opportunities to invest in too.
Tolerance For Risk
The amount of risk you can tolerate dictates and limits the investing options you have. Unless you are a seasoned, affluent investor, investments that are subject to market volatility, as well as financial and economic uncertainty should be avoided. Instead, focus your attention on investment that offer regular dividends or a residual income.
Rate of Return
Although everyone is in search of a “great” return, everyone’s definition of “great” is likely to be a little different. Sure for some it will be high rates of return, but for others it may be smaller, more consistent monthly returns. It is ok to be enthusiastic about investing, but do not let your decisions be influenced by greed.
Making choices about what type of investments to pursue is the first challenge you will face as a novice investor, particularly if you choose to not rely on an investment adviser or money manager. Carefully consider the factors outlined above for an introspective that reveals your best investing options when choosing investments.
For the last decade the container shipping sector has been struggling through a slump in the global economy, as well as persistent overcapacity concerns. These challenges have caused profits to fall and industry leaders, like Hanjin Shipping, to collapse. Moreover, the weight of increased competition and ridiculously low freight rates has resulted in acquisitions, mergers, and partnerships between the leading container lines. This cooperative approach has been the industry’s savior and much of the reason the maritime shipping sector will experience favorable growth in the coming years.
With the “thinning out of the pack” and the subsequent drop in competition – resulting from the new alliances, the remaining container shipping lines have been able to reverse their previous losses and emerge profitable early in 2017. For many, the additional profits have been used to fund investment in shipping containers, buy new ships, and improve efficiency. The new additions, like reefer containers and 20,000 TEU vessels, are expected to improve the operational performance of their fleet and meet the expanding needs of their clients. Regardless of their motive for the investment, the move will ensure they can meet the demands and pressures of an expanding global economy.
Despite the struggles and obstacles they have experienced over the last (nearly) ten years, bigger profits are certainly on the horizon for container shippers. With further investment into ports, terminals, and infrastructure, operational savings will continue.to work in partnership with higher freight rates to ensure continued growth. This will translate into a stronger, more sustainable global economy.
The newfound prosperity in the container shipping industry has also opened doors for investors. Although it is not likely private investors will purchase a container ship, they do have the opportunity to invest in containers. With the help of a container leasing company, the investment community can purchase their own fleet of containers and lease them to manufacturing, shipping, and logistics companies. This allows investment-seekers to profit from the sector’s renewed vigor and strong growth.
As private investors, we do not have access to the insightful information that institutional investors do. So, when we look for new investments to add to our investment portfolio, we must conduct our own research to make good, educated investing decisions. For myself, this includes watching interviews, reading published books and memoirs, as well as perusing investor testimonials and reviews.
Taking the time to watch or read an interview done with a world renown investor, like Warren Buffet for example, can deliver valuable insight, that was collected from years of investing experience. I am in favor of interviews because of the freedom each participant has to engage in a deep, detailed conversation. This intimate environment makes the exchange of information easier to communicate and easier to receive; thus, much more valuable.
The trouble I see with interviews is that they are short, often only a few minutes. Thus, there is not always a great deal to process and apply to your investment portfolio. On the other hand, published books and memoirs offer several chapters of first-hand accounts and experiences. These valuable resources can be used to learn and apply tried and proven strategies for successful investing. This is because they are offered as a personal perspective and interpretation.
Reading an investor’s review can provide more detailed information about a specific investment opportunity. In most instances, the information found in communities, forums, and blog comments is shared by people with different motives. Therefore the “lessons learned” should be subject to intense scrutiny. To be valuable, it is important that the moderator allow the audience’s comments to encourage constructive debate and not mislead visitors with fake news or a fake review.
Every investor will have their own approach to researching investment opportunities and building their investment portfolio. The resources I recommended have given me the confidence I needed to make intelligent investing decisions. I invite you to include parts of my research strategy into parts of your own.