Even without a financial magazine subscription, chances are you’ve caught wind of the havoc global markets have been through recently.
Financial heavyweights and fund managers try to take those opportunities to show their clients and investors where money can be made when the word “recession” is on the tip of everyone’s tongue.
Lucky for you, I’m going to cut through all the fakes and phonies to hand you the sturdy safe haven your money has been searching for.
I’m sure you’ve heard the rules of thumb and generic recommendations for diversifying your portfolio.
If you’re new to investing, diversifying essentially means making sure you’ve got positions in places that will make you money no matter what the broader market is doing.
For example, when all stocks are on the rise and economic outlooks are good, you’re going to want a lot of stocks to make you big money.
But all good things come to an end, and if you’re left high-and-dry with nothing but stocks who’s valued have halved, you’ll regret not hedging those bets with securities that go up when the market goes down.
Sounds fake, right? But it isn’t.
Stocks should only make up a portion of your investment profile to ensure that if the markets take a sudden downturn, you’re not left at a zero balance.
Some of the most common “safe haven” investments are bonds, treasuries, and gold.
Think back to the $50 bond you’ve given as a birthday present before (or maybe you’ve even received one).
You had the anticipation of waiting for that bond to reach maturity to collect your cash, and if you’re lucky, a little extra off the top.
Bonds don’t make headlines because they don’t make tons and tons of money.
But if you don’t have at least some of your capital invested in bonds, events like the 2008 crisis could leave you penniless in the blink of an eye.
That being said, I want to make sure your portfolio is properly diversified, seeing as even industry “experts” aren’t sure what’s going on right now.
Between the trade war, global unrest, and mixed economic signals, this is a moment where you want to play it safe rather than sorry.
The safe haven investment I’ve brought for you today is a floating-rate bond exchange trade fund (ETF).
ETFs are bundles of related stocks all clumped together to track a certain industry or sector.
Floating-rate bonds are debt tools with changing interest payments.
The iShares Floating Rate Bond ETF may not have much of a return to boast, but it does have one thing that makes it invaluable to us: sturdiness.
Despite the recent dip in the market that rocked nearly every security, this stock price has rebounded flawlessly.
When faced with uncertainty in investing, often times it’s difficult to find a place to put your money that will feel more like a smart choice than a Hail Mary play.
In terms of finding a steady bundle of securities to put your money on, this floating bond ETF, or FLOT, is the way to go.
Worry no longer about losing most, if not all, of your invested money overnight with a sudden dip in the market.
Placing a healthy chunk of your capital in a safe haven investment like this will save you from the next 2008.
Wow