Founders Grove Insights

Why You Need to Diversify Your Investment Portfolio

written by Ryan Cox

Why You Need to Diversify Your Investment Portfolio

Your investments are likely already somewhat diversified—it would be unwise, for example, to invest only in stock for one company—but relatively few people actually take their investments beyond just stocks and bonds. While it may sound like a risky move, diversifying your portfolio to include less traditional investments actually insulates you from many market volatilities.

Real estate returns are largely uncorrelated to stocks and bonds, so they are typically not subjected to the same ups and downs that your stock market investments are. In addition, the National Council of Real Estate Fiduciaries recently found that real estate returns are less volatile overall than traditional investments, making real estate a way of ensuring ongoing profitability and growth.

Within the world of real estate investing, multi-family housing yields its own benefits. Whereas homeownership declined after the mortgage crisis, the Joint Center for Housing Studies of Harvard University has found that demand for rental—and multi-family—properties is surging across many different demographics. Capitalizing on this trend can bring increased stability to your portfolio and potential to increase returns, thanks to the near-yearly nature of leases.

If you’re interested in taking the first step toward investing in real estate, or if you’d like to discuss adding another real estate investment to your portfolio, Founders Grove can help. Contact our team to set up a strategy session so we can discuss your needs in greater detail.