Retired investors are worried about the future, rising prices, and living longer. As a result, they seek retirement investment opportunities to maintain a regular cash flow and provide capital preservation in an uncertain world. They need a balanced portfolio that includes shares, bonds, and other suitable assets to achieve these goals.
Alternative investments fall outside the definition of mainstream investments like shares, bonds, or real estate. They provide a unique return and can include commodities, natural resources, and art. These investments can also help provide downside protection and be part of a robust portfolio.
Bonds are similar to shares, but they have significant differences that typically make them a safer investment. Because they are debt instruments, bonds pay a fixed interest rate to the investor.
The interest rate is normally higher than the interest rate paid on a savings account, referred to as the “coupon” rate. Corporations, governments, and municipalities issue bonds.
The share market is not the only place for investors who want to invest in commodities. As shares have become high-priced, investors are looking to build other investing strategies.
Commodities are typically measured by the value of a specific weight; many of them are priced per ton. Conventional commodities include steel, gold, and silver. The term “commodities” also includes precious metals, energy, and livestock.
The 2008 global financial crisis (GFC) ruined many investors’ portfolios, and the low-interest rates of the past several years have not put them back on track.
Fixed-income investments are interest-bearing securities that investors can invest in to earn regular interest payments. Two types of fixed-income investments include bonds and bond funds. Bonds are debt instruments issued by corporations and governments that investors purchase to achieve a higher rate of return than they would by depositing the money in a savings account (see above). Bond funds are mutual funds that invest in bonds.
Real estate is another asset class that investors can use to provide regular income and capital growth and a potentially great way to diversify a portfolio. The potential returns from alternative investments and real estate are typically lower than those from stocks, but the risk tends to be lower.
Many experts believe the market is in a bubble due to periods of low-interest rates and that people are afraid they will miss out on the next big run-up in the market. To others, a downturn is inevitable. Consequently, investors put their money into investments that preserve their capital and provide cash flow. One of the primary ways to do this is to invest in shares.
Choosing the Right Retirement Investment is a Must!
As the world has become more connected, investors have become more concerned with protecting what they have, achieving the highest return possible, and investing in investments that will provide regular cash flow and capital preservation.
However, the global economy continues to be volatile. Investors must thoroughly research their investment opportunities before investing funds. If you need help with investment planning on the Central Coast, turn to Central Coast Financial Planning Group. Our financial advisers can help you manage your investments and make sound financial decisions. Book a complimentary meeting now!
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