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RE: Steem Bounty - Your 1 Million Dollar Portfolio for 1 Year - How Would You Diversify? Cash, Real Estate, Gold/Silver, Stocks and Crypto

in #investing7 years ago

Here's how I would construct my portfolio:

Cash 10%

This is strictly money to be set aside in case of emergencies where I need to get my money out immediately. The cash would go into money market accounts, and/or short-term CDs and bonds -- the potential returns may be lower than other investments, but they are practically guaranteed and my liquidity would be assured.

Real Estate 0%

This will really depend on where each individual lives and the laws in effect there. In my case, the risk potential of hassles involved (different rules in different nearby areas based on HOA rules, landlord/renter legal relationships, etc.) is too much to make investing in real estate worthwhile to me.

Gold 20%

Gold holds a secure value and can be used as a hedge against inflation, but it's not a very liquid asset -- unless the fiat system suddenly collapses, in which then it becomes very liquid. For this reason, I definitely want to own and have ready access to some gold [coins].

Stocks 40%

I would split the stock section of my portfolio into two parts: 20% for long-term holding and 20% for short-term momentum/day trading. As long as I'm using a competent online brokerage, I should have little trouble finding the stocks I want to trade in based on my personal tolerance for risk and personal desire for potential gains. Because it's more liquid than crypto (in that I expect to be able to convert my holdings into cash and withdraw it more quickly should the need arise), I weigh my portfolio slightly more towards stocks.

Crypto 30%

These offer the highest potential risks and rewards, but isn't quite as liquid as stocks. If I was confident in crypto's liquidity and my ability to completely trust the crypto markets, then I'd probably be going with 70% crypto and 0% stocks.

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