Top Investment Strategies: Building a Strong Portfolio

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The best investments will be slightly different for everyone, depending on your financial goals, but there are some standout asset classes that can strengthen any portfolio. Every investment is speculative to some degree, so what may be the "best" investment one year can look like a poor choice in another. Long-term investors look for securities that are proven performers throughout all market ups and downs. Choose your investments wisely and you'll enjoy greater wealth in the future.

Strong Companies

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Strong companies that lead their market sectors tend to maintain a strong advantage over the long term. Investing in such companies often pays dividends as well, so holding these stocks can be a good strategy for generating passive income.

Real Estate in Growth Areas

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Real estate has historically held value and appreciated well in growing areas. If the population is increasing and companies are starting up business in your area, buying a home can pay off in the long term.

Investment Education

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Investment education isn't strictly an "investment" in the strictest sense, but it can offer good returns over the long run. Read books on investing and consider taking a course on strategies from an expert investor. It could lead to a growth in your net worth.

Financial Discipline

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Saving money can improve your net worth risk-free and without incurring additional taxes. Reducing spending by only $500 per month would mean an additional $6,000 a year that you could put toward other investments.

Bonds

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Bonds, particularly government bonds and highly rated corporate bonds, hold value well over the long term. Bond yields can provide a source of passive income, and bonds usually offer less volatility than investing in stocks. Municipal bonds are exempt from state and local taxes.

Precious Metals

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Precious metals like gold and silver are more secure than most equities, although their prices can be volatile. Companies can go bankrupt and stocks can go to zero, but people have considered precious metals valuable since the dawn of civilization.

Annuities

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Annuities are retirement insurance plans that allow investors to pay a premium to a company and then receive disbursements later in life. As long as the insurance company that provides the annuity remains solvent, such plans can grow your money safely and help secure a comfortable retirement.

Certificates of Deposit

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Certificates of deposit, offered by banks, credit unions and brokerages, offer higher returns than bank savings accounts with a similar level of security. Also, CDs are insured by the Federal Deposit Insurance Corp. up to $250,000 per bank.

Hedged Mutual Funds

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Hedged mutual funds are managed to provide diversified growth to investors. Risks are managed carefully to prevent massive declines. The growth rate may be lower than other funds, but the additional safety appeals to many investors.

Job Training

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Learning new skills can keep you competitive in the job market and increase your earning power. Take courses related to your field, and read books on how to enhance your skills. The payoff can be more dramatic than investing in a growth stock.