Nearly every person with a pulse grows up hearing about the importance of diversification when it comes to investing. That is a given, but the reality that we all want our investments to show as big an income as possible. This must, of course, take into account an individual’s age, status in life, and comfort level with risk. Combining these concepts does not always allow for tremendous growth in income along with it.
There is a way to make it happen, however, so consider the following four effective ways to add more income to your investment portfolio.
Consider Fixed Income Investments
It is important to include some fixed income investments into your portfolio. Many people these days tend to shy away from bonds. Some are not happy with the historically low yields that have been evident for the better part of a decade and are making no signs of increasing any time soon. Others just do not see bonds as very glamorous and potentially increasing their income. The reality, however, is that bonds will give you income even in a down market. Consider the reality that all of your stocks could lose money in an off year. Under such a scenario, bonds would still provide you with some income as a fixed income investment, which is why firms like Fundrise recommend them.
Bond Funds do not have to be Risky
Bond funds can add a great deal of income to your investment portfolio as well, but many stay away from them because of the perceived risk. Take a look at some Fundrise Reviews and you will find more than a few that buck this trend. It does seem that the higher the yield in bond investing, the higher the risk will be. That is always the tricky part about trying to make money in the markets. You also have the Federal Reserve to contend with, as your bond prices could go down noticeably if they choose to raise interest rates. There are other ways of finding a good bond fund, however, so do not discount them altogether.
Look Into Retirement Income Funds
No mater what age you are now, retirement should be one of the primary goals of your investment portfolio. There are some funds out there that are designed solely for the purpose of providing retirement income. These will take your investment dollars and put them into a healthy, low risk, mix of stocks and bonds to provide you with some nice income when the time comes.
Go for Stock Fund over Exchange Traded Funds
Exchange traded funds can certainly provide a nice income, but the risk might be too much to handle. What you want instead is to look for a high yield stock fund. You will get the income that you want, thanks to the higher yield, and at a lower cost as well.
While there is no sure fire way of turning every investment you make into a winner, there is a way to add to your income. This goes for periods when the market is in decline as well. The key is to set clear objectives and set out to meet realistic goals. These four strategies will really help you to do that, so consider implementing them into your investment strategy today.
This is an interesting list! Mr. FAF and I have done none of the things above except for retirement accounts. We plan to up our retirement fund in a couple of months when Mr. FAF settles in at his new job. Thanks for sharing!