Is Your Portfolio Diversified Enough?
By Percy Nikora, Owner, Co-Founder of Penn Capital
Having a diversified portfolio is important because it helps to reduce your overall risk. By spreading your investments across different asset classes, sectors, industries, and geographic regions, you can potentially minimize the impact of any one investment performing poorly. In other words, diversification allows you to "not put all your eggs in one basket".
If you invest all of your money in a single stock or a specific industry, for example, you're exposed to the risks that are specific to that stock or industry. If that stock or industry experiences a decline or downturn, your entire portfolio may suffer significant losses. If instead you hold a diversified portfolio that includes investments in various asset classes, you're more likely to have some investments that are performing well even if others are performing poorly. This helps reduce the overall volatility and risk of your portfolio.
Today, many investors are realizing that combining stocks, bonds, and cash investments do not provide the diversification needed to combat downward trending markets and high inflation. As a result, savvy investors are turning to alternative investments such as real estate, commodities, and private equity to further diversify their portfolios.
Further diversifying beyond the traditional portfolio of stocks, bonds, and cash can improve returns over the long run while mitigating the impact of losses during recessionary periods. This means that your overall returns are less likely to be dependent on the performance of any single investment, as well as broader market trends.
Overall, a diversified portfolio can help to minimize risk, improve returns, and provide a more stable investment experience over the long term.
If you're interested in further diversifying your portfolio, check out Penn Capital's current investment opportunities by clicking here.
5 Keys to Investing in Distressed Real Estate By Ed Rogan, Owner, Co-Founder Buying distressed real estate certainly isn’t for the faint of heart. An inexperienced investor can easily be swayed by the promise of a project sponsor who doesn’t actually have a plan for turning the property around. But that doesn’t mean you shouldn’t…READ MORE >
Gaining an Edge through Cold Calling By Ed Rogan, Owner, Co-Founder In many ways, commercial real estate is an “eat what you can kill” industry. The most successful investors, developers, brokers and other CRE professionals earn their living by scouring the market to uncover the next big deal. Ask the industry’s best and they’ll often…READ MORE >
Trial by Fire: How We Got Started By Ed Rogan, Owner, Co-Founder People often use the term “trial by fire” to explain how they learned something. In our case, the term is all too appropriate. Looking back on it, the story of how Percy and I got started almost seems unbelievable. We were just…READ MORE >