Diversifying one’s portfolio of assets is a common investment strategy.
Throughout history, investors have been taking on more and more risk in order to generate higher returns. One of the most popular forms of investing during a financial crisis is to diversify your portfolio by buying a mix of stocks, bonds, and other investments.
The 2020-2021 financial crisis caused by the Covid-19 Epidemic, has led many people to diversify their portfolios to include less conventional investments such as collectibles, art, crypto currencies, rare metals and even bullion.
Investors are turning to assets that are not correlated with the stock market. They are diversifying their assets due to the uncertainty in the market. Now people don’t just invest in stocks, they invest in all kinds of assets like rare metals, crypto currencies, art and collectibles. The following is a table of few examples of non-correlated assets: In the coming years, we might see more people investing in these assets during the current financial crisis.
A Guide to Non-Correlated Assets, and How They Can Make Your Portfolio Less Volatile
What is a non-correlated asset and how does it work?
A non-correlated asset, is a type of investment, that does not move in tandem with a person’s other investments. It can be a hedge against fluctuations in the market. The best way to diversify your investment portfolio is to invest in both correlated and non-correlated assets. Non-correlated assets are those that do not move in tandem with other investments and can therefore provide stability during difficult market conditions.
Benefits Of Investing In Non-Correlating Assets
Investing in non-correlating assets can be a great way to diversify your portfolio. It reduces volatility, and it lessens the risk of your portfolio dropping drastically because of one particular asset.
Some investors might be hesitant to invest in non-correlated assets, but they are actually pretty safe. After all, the most popular investments are stocks and bonds. And those two types of investments correlate with each other quite a bit. They both experience changes in value when the economy is doing well or poorly.
The main benefit of investing in non-correlating assets is that they reduce volatility for your portfolio. This means that you don’t have to worry as much about losing money on an investment if you also have some correlated investments with it.
Investors who want to minimize their risk and volatility. will ideally invest in non-correlating assets.
- Non-correlating assets are defined as items which do not move in a similar fashion, with the same degree of frequency, or with the same magnitude as other items being considered for investment.
- Investors can reduce their risk by investing in non-correlating assets.
- The main benefit of investing in non-correlating assets is that it is less risky than investing in more traditional portfolios. There is less volatility as well as lower risk for those who invest in these types of investments.
- Non-correlating investment options have a wider variety of potential returns and can be a good solution for investors who want to minimize their risk and volatility.
- Many investors believe that diversifying their investments is the best way to reduce investment risk. They invest in assets that are not correlated to each other, so they don’t face losses due to fluctuations in any one market.
Finding the best correlation for your portfolio can be a challenge. It is important to have a diverse portfolio, because this will lower the volatility and risk of your investments. You should invest in assets that are not correlated with each other to get the most out of your investments.
Property Investment – Buy While Cheap and Wait or Not?
Investing in non correlated assets can be difficult and it is important to find an asset that has low risk and volatility. These types of investments will allow for diversification which will give you more of an opportunity for success. You should compare the risks associated with different types of investments so you know what is right for your portfolio type.
Why Should You Invest In A Non-Correlating Asset?
In my humble opinion; If your finances can allow diversification, then yes. Especially in this particularly unstable time of Global Economic Crisis due to the Covid-19 Pandemic, and the un-surety of how the future will pan out with which direction the economy will take, a physical asset based standard economy as before? or a digital economy? The end of ownership, and a move to digital currency instead of a cash based society means that the coins and banknotes still remaining, will become as collectible as a penny black postage stamp.
Most physical assets in the future, such as homes and vehicles, are to be replaced by subscriptions. For example, as the property prices fall with people needing to sell their homes due to joblessness and bankruptcy during the Pandemic, Governments are creating shadow companies to buy up all the homes, and possess them, and even are offering in some countries such as USA, 150% the market value price. This wil end with most people selling their homes to the state, who will eventually hence, own all homes, and we shall have to subscribe (Rent). This leaves no true security of bering abler to perform home improvements and the like, which would be transformed and sold as upgrades. Later tenants to the then upgraded apartment or house your subscribe to, will then be rented at at a higher subscription rate to later ‘subscribers’ (tenants). Failure to pay subscription will be accompanied b y a ‘terms of service’ type rent contract, that will permit immediate eviction, much faster than present legislation in the Pre-Cashless Society can implement. The landlord benefits, the Tenant loses many freedoms. Personally i would not wish to be an ‘evil landlord’ in the eyes of anyone, even if it was because of diversification of my assets, and self protection of wealth, because my ethics have hated ‘Land Lords’ (Lords of Land nobody ever gave to them to be Lords of in the first place), and in truth, i do not truly believe in ownership. Not believing in ownership, also means i do not recognize, that any other person or company can be an owner of something, and cannot therefore offer me a subscription to something they did not own (given by mother nature to them especially). However, I do risk manage what Humans assume to be personal assets, whilst this particular system of Rule Governance, Justice, Trade and Exchange still remains functional. After which, i would be happy to live planting vegetables and living in a tree-hut like Tarzan, and forget we ever had concepts such as money, selling berries that grow on trees for free for all creatures, and just be happy watching the sunset on the beach and drinking some coconut juice from a fresh coconut.
Unless of course, you have already your own property and refuse to sell (advisable). This is a long term investment that could make any of the few personally owned pieces of property of extremely high value for eventual resale. All of these factors must be contemplated, in order to make sure that one’s assets do not become transformed from a hoard of treasure, into a pile of scrap metal.
What i Never Do; Never Play the Stock Market or Forex Unless You Are the Broker, because Only the broker Always Profits.
So what do i Invest In?
As i said, i use the currency exchange within my Paypal Account to increase the money by merely exchanging money from one currency back and forth, as they fluctuate.
I also collect old Sovereigns, and Krugerrands. Gold Eagle Coins and Silver Dollars, Ancient Asian Silver Money, and collectors Minted Coins (circulated and uncirculated) – Preferably limited editions. Historical Gold Coins from various cultures and countries, and mints, but mostly sovereigns, which are a highly accepted and preferred way of investment. Some sovereigns are very rare and expensive. I recommend study of the subject and to be knowledgeable in the topic to collect wisely and profitably.
Rare Earths, Gold and Silver Bullion, Palladium, Circulated, and Uncirculated Collector Coins from different Mints, such as the Royal Mint. from whom i also buy Gold and Silver Bullion. Bullion Bars are good for their inherent value and slow but steady increase in value over time, but coins, have the advantage of being able to let’s say, enter the USA at JFK airport, and not be suspected of being a criminal or tax evasion, much more easily than if you you had three 1KG Gold Bullion bars. Even the most educated customs officer will not haver a tendency to realise, that honest people also buy gold bullion, and most would assume you were a criminal of some kind. So, i like gold and silver collector coins, especially limited editions, Both as a hobby, and speculative investment for eventual resale.
Valuable jewellery; One way to travel with more than most countries allow entry with Cash or valuables, is to wear valuable jewelry, which, is also an investment like artwork, that is worth as much as the person who really wants it will pay, and can be a source of high profits, if bought from the source, resold to the right person in the right place, where such items are much more expensive (e.g. buy Emeralds in Colombia, and sell them in the United States).
Bitcoin (Digital Currencies). Bitcoin will soon reach its maximum number it will ever make, and the price has tripled between 2020 and 2021. After the last bitcoin has been made (virtually/digitally/imaginarily), only subdivisions will be possible, whose value will keep increasing. However, i believe that when subdivisions get into the 0.0000000-000000000456 of a bitcoin per 1000$ (exaggerated example), that the currency will become unpopular or unusable because of the difficulty in managing the long numbers in our heads. And so, i only intend to buy bitcoin until i see the last one made, and its take whaterver price increase profits i have made, and pool them in something else.
Gems; Rubies and Emeralds (i am well studied enough to invest, as i am able to select the best and most valuable gems, from my decades of perusal of amulets, I already developed the fine eye, to look under the microscope at gemstones, and evaluate them). Rubies and Emeralds from the world’s preferred mines are something I like to collect, study, and improve my abilities of evaluation, for this is a very delicate study that, if mastered, can allow you to find stones that are worth extreme sums of money, and if lucky, get them at a very good price, if travel to buy straight from the source.
Stocks – I do not trade in stocks, for i believe a bird in the hand is worth more than 2 in the bush, and so most of my assets are physical, with digital assets and online money for basic shopping and everyday payment needs, but i believe, that real treasure and wealth, is tangible, touchable, and enjoyable. I prefer to take out one of my rubies or coins, or Thai ancient amulets from my collections, and examine them, enjoying the study of all facets and features, than to watch a graph on a pc screen showing me how my stocks are rising and falling.
Minted Coins for me, are becoming both a grand hobby, topic of intensive study, collection, and also speculative investment for resale to collectors (and keep collecting more myself, and improve my collection, which is wealth in itself, for rare coins, especially bullion sovereigns, are very easy to trade, and fetch a good price.
Below are Just Some of the Coins i have Collected, for you to see.
I shall be blogging about, teaching, and even reselling some of the coins i have on this blog in my shop section soon, as well as my journey into expertise in gemology with rubies and emeralds.
The Best Investment Asset; HAPPINESS WITH WHAT YOU HAVE
In truth, apart from planning to make sure one is not broke or poor in one’s retirement, the best assets to have, are these; Enough to Live On, Loving Family, Joy of Life, Peace and Wisdom, Good Friends, Food and Drinks in your Home, with enough to afford to pay your bills, own your own home, and to have enough to live on and have a good lifestyle. After all, that is the only reason we need ‘money’ (instead of true assets that are useful and give pleasure to life), in the first place!
We need money to live, but we do not need to live for money!