Thursday, October 2, 2014

Don't Put All of Your Eggs in One Basket


by Spencer Marona, Managing Director

A tsunami of social media has been sweeping through spinning out many startup tech companies. The revenue generated by these companies is produced through successful advertising models as well as selling their 'big data'.  Many of us remember the dot-com bubble and the Great Recession still haunts most in this country. Both were awful. I cannot count how many times I heard clients, family, and friends say that they would have invested differently.

My point is that investors who have the majority or all of their investments in stocks, bonds, cash, mutual funds, etc. may think they are being conservative, while unknowingly increasing their risks.  In addition, if you are an owner of one investment property, when was the last time you seriously considered the acquisition of another for diversification?

In a recent NREI article titled Five 'Whys' for Commercial Real Estate Investing, CEO of Everest Income Property, David J. Lynn Ph.D., outlines five credible benefits for investing in commercial real estate:
  1. A large investable universe,
  2. Income returns,
  3. Lower volatility,
  4. Diversification, and
  5. Inflation hedging.
I am not an expert in social media, nor am I an economist, but we have all heard that "history repeats itself".  My position is simple"don't put all of your eggs in one basket" if you own one investment property and are able to place capital in another. Similarly, consider investing in an investment property to diversify just as you would with multiple companies in the stock market vs. one.

And yes, I recognize the irony of my post being read via social media. 

Call one of the HFO team members to discuss your investment strategy and whether you are positioned to minimize risk with maximum returns.