August 27, 2022

How Can You Rebalance Your Portfolio From Public to Private?

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The advent of the internet and the continued explosion of digital markets means there is no shortage of potential investment opportunities for everyday investors. You now have a chance to invest in a variety of areas. The key is ensuring that your investments align with your overall financial goals and that you are putting your money in the best place possible. Many investors are looking to rebalance their portfolios to incorporate private markets. This desire to rebalance begs the question — how can you make an appropriate rebalancing of your portfolio?

How Does a Rebalancing Align With Your Financial Goals?

The simple reality of investing is that everyone has different financial goals and levels of risk tolerance. Some people are willing to take significant risks with their investments, as they have money to burn and want to turn their cash into more — even if that means risking it all. Others are saving for retirement and have shorter time frames, meaning they have lowered risk tolerance and less time to make up potential losses.

Rebalancing into private investment areas can be a great way of better aligning your investments with your financial goals. However, you can't rebalance your portfolio if it means losing assets. As such, you must make sure that any rebalancing you do makes sense for your financial future. You should only shift to private investments if they are open to potential risks and rewards and thoroughly discuss all information about an investment. They should explain all ways you stand to gain, but also all ways you may lose. 

What Do You Know, and What Can You Learn?

Private markets are, by their very nature, less accessible. As such, there's a key question — what do you know, where can you find it, and what can you learn? In other words, why would you invest your limited dollars in an area that is difficult to understand, highly volatile, or less stable?

Of course, sometimes, you may not know what is involved in a market, but you may have access to resources that can help you understand. For example, take residential multifamily. This market may be easy to understand in theory, but there are more intricacies that matter deeply to steering your investment dollars. A solid investment company should be able to answer all questions, explain how they manage your dollars, and tell you why your money will be safe in their hands. They should also be willing to explain how your money will be used.

What Are the Barriers to Entry?

If you are investing in the stock market, you only need an app and enough money to buy a stock. That's it. In other private markets, there are barriers to entry that you may need to understand. For example, is there a minimum amount of money that you need to have to make an investment? Do you need a recommendation from someone? Is there a minimum amount of time your money may be tied up? 

Are you looking for an excellent source of revenue in a private market managed by experts and has experienced massive success and growth? Check out Infinity Real Estate, where we help investors reap returns on their investment by investing in world-class properties that align with their financial goals. 

Valentina oversees Infinity’s business development, corporate structuring, global expansion, and administration. She has over 10 years of international experience working, including a venture capital firm and a unicorn startup. She holds a Bachelor of Science in International Economics & Management from Università Bocconi.

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