Warren Buffet, one of the most successful investors of all time, said that “a diversity of commitments creates a most attractive package of safety and appreciation potential”. As investors work to improve their financial portfolios, such diversity should be approached with caution because the security and risk associated with different investment options can vary.
Mutual funds are collective pools of money provided by individual investors for money managers to invest in various securities. Since funding is a group effort, each shareholder or investor benefits and loses equally, and expenses are shared. While mutual funds are diversified between stocks, bonds and other securities, they are typically less risky than individual stocks or bonds.
Diversifying your commitments is a great strategy, but the risk of each opportunity should be carefully considered. Work with your Enso | Sonoma financial advisor as you make these important decisions.
If hard work, patience and/or luck have brought significant wealth into your life, there are a few things to keep in mind. One is that you must continue to manage your personal finances wisely. As you struggle to manage dilemmas, such as people asking for financial help or being approached with investment opportunities, your long-term success must remain the priority.
Living below your means, spending slowly, and creating a reasonable budget can help you maintain your wealth over time. Paying off high-interest debt and avoiding new loans, other than a fixed-rate mortgage, can also help keep money in your pocket. With new wealth comes the temptation to make risky financial decisions, so be sure to consult your Enso | Sonoma financial advisor before making a commitment.
In a time of trade wars and tariff talk that stem from trade-related trauma and politics, it’s easy for good news and cap gains in the stock market to be overlooked. Fortunately for investors, American companies are soon to present their second-quarter earnings-reports, and positive results can give newfound strength to equities. If most of these organizations perform well and executive management diminishes the threats of rising trade tensions, 401(k)s can see a boost as stock prices rise.
With the threat of a trade war between the U.S. and its trading partners lingering, Wall Street will pay close attention to how top corporate executives think this will affect their business results. Stay tuned as earnings season will confirm just how resilient the U.S. economy can be. As you observe your current investment performance or consider new ones, be sure to discuss trends with your Enso | Sonoma financial advisor.
As cryptocurrency has the potential to be disruptive technology, it’s important for investors to approach it cautiously. Blockchain in particular is in the early stages of development, but as the technology evolves, investors may experience high gains and losses. With the introduction of new funds that provide cryptocurrency access, investors should be aware that the future is unknown.
About 10 funds that include both exchange-traded funds and mutual funds offer some exposure to blockchain. Due to their volatility, the Securities and Exchange Commission doesn’t currently allow these funds to invest directly in cryptocurrencies. Investment management company, Morningstar, doesn’t cover these funds and has yet to rate them. In your navigation of the cryptocurrency landscape, be sure to discuss all factors with your Enso | Sonoma financial advisor.