U.S. Money Reserve Reviews: Choosing Your Asset Mix
Nov 16, 2022
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Diversification is an important financial strategy that reduces overall risk exposure by allocating wealth across different financial instruments, industries, assets, and asset classes. In principle, the average yield of a diversified portfolio is less susceptible to variability, fluctuation, and the probability of loss than the yield of a portfolio that holds only one or a few types of assets.While diversification can provide additional protection, every portfolio carries some level of risk exposure. Factors like interest and exchange rates, inflation, and political and economic instability are not specific to any single company or industry. However, proper diversification can help to minimize risks associated with these types of factors while helping provide insulation against risks that may be specific to certain businesses or industries.
Consider this example: You have a portfolio that contains only airline stocks. Systematic risks such as a rise in fuel prices or macro events like geopolitical tensions that lead to less air travel could dramatically reduce the price of the airline’s stock, thereby negatively impacting your portfolio. Conversely, if you had diversified your portfolio with stock in petroleum companies, that area of your portfolio may see growth if people start traveling more by car as a substitute for expensive or restrictive air travel, thereby reducing your overall risk exposure.
The act of balancing a portfolio across different assets and asset classes is what diversification is all about. It focuses on minimizing risk exposure and increasing growth over the long term rather than maximizing short-term returns in a high-risk environment. U.S. Money Reserve reviews and provides access to a variety of precious metals, alternative assets that allow portfolio holders to build robust and diversified portfolios.
Asset Selection and Portfolio Strategies
To maximize the benefits of diversification, it is important to first understand general diversification strategies as well as the various asset classes available.
To shield a portfolio against macroeconomic events that affect financial markets, one strategy is to diversify across multiple sectors and industries. You can further diversify across different companies within a single industry. Other strategies involve diversifying across international borders to benefit from the movements of markets overseas as well as diversifying across time frames, such as by holding both long-term and short-term bonds. When developing your own unique portfolio diversification strategy, it’s important to note that some assets, such as real estate, may take longer to generate returns than others. However, longer-term assets may not share the same risk factors as shorter-term assets like stocks.
Finally, you can diversify across asset types and classes. The most common choices are stocks (equity market holdings), bonds, ETFs (indexed funds), precious metals such as gold and silver, commodities, mutual funds, fiat currencies, cryptocurrencies, and real estate. Some consumers also like to hold art or collectibles in their portfolios.
Every one of these asset types experiences its own set of risks. For example, with a rise in interest rates, stock prices may fall, but bonds may perform better. Some cryptocurrencies have generated massive returns, but the crypto market tends to be very volatile and risky for portfolio holders. ETFs, mutual funds, precious metals, and real estate have historically appreciated less rapidly over time, so they may be relatively less susceptible to regular market fluctuations. Different asset categories attract different types of portfolio owners because each consumer has their own unique financial goals and acceptable level of risk exposure. With a deep understanding of physical assets and the precious metals market, U.S. Money Reserve can help you build or expand a robust and diversified portfolio today.
U.S. Money Reserve Reviews the Benefits of Diversification
Portfolio diversification is one strategy used to reduce the overall risk exposure of a portfolio. It can also potentially improve the rate of return for portfolio owners while preserving their wealth for retirement or for future generations. Diversification can reduce the time needed for active portfolio management and can allow exposure to new assets while providing individuals with the stability they need to achieve their financial goals. However, building a well-diversified portfolio can be challenging. That’s why, when you call your dedicated Account Executive, U.S. Money Reserve reviews your existing portfolio with you and then provides a wealth of resources and information regarding precious metals and portfolio diversification. This can help you build a better understanding of how you can use physical precious metals or a precious metal IRA to minimize your portfolio’s overall risk exposure and preserve your wealth while working toward the goal of financial freedom.
About U.S. Money Reserve, America’s Gold Authority®
U.S. Money Reserve is one of the nation’s largest private distributors of government-issued gold, silver, platinum, and palladium products.
Founded in 2001, U.S. Money Reserve has grown into one of the world’s largest private distributors of U.S. and foreign government-issued gold, silver, platinum, and palladium legal-tender products. Hundreds of thousands of clients across the country rely on U.S. Money Reserve to diversify their assets with physical precious metals, primarily in the form of legal-tender gold and silver coins and precious metals IRAs.
U.S. Money Reserve’s uniquely trained team includes coin research and numismatic professionals equipped with the market knowledge to find products for precious metals buyers at every level. U.S. Money Reserve goes above the industry standard to provide superior customer service, with the goal of establishing a long-term relationship with each and every one of its customers. U.S. Money Reserve is based in Austin, Texas. Like them on Facebook, connect on LinkedIn, and follow on Twitter.