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Why You Should Consider an Investment Fund

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Investors in New York, Alberta, or Sydney all know that data and research drive portfolio growth. With a strong financial plan and the time earnings power of capital investments made in pursuit of long-term growth, investors in all major US cities, and beyond can chase after their goals and support lofty ambitions while knowing that their principal is protected.

Many investors choose real estate as a foundation from which to build, while others still prefer gold or silver bullion, corporate CDs, or government bond holdings to provide a hedge against market shocks. No matter your preferred investment vehicle, investment funds offered by a wide variety of financial institutions provide the greatest staying power in any asset class.

Adding an investment fund to your portfolio is one of the easiest things you can do and it provides unparalleled strength to your retirement plan alongside phenomenal dividend returns. Perhaps this is why the New York Stock Exchange (NYSE) is full to the brim with these investment options (and why retirement planning in Syracuse, NY, Charlotte, NC, or beyond all revolve heavily around these investment options).

Investment Funds: A Brief Overview


Many investors who are weighing their options in Exchange Traded Funds (ETFs), Real Estate Investment Trusts (REITs), and other mutual fund options don’t understand the value of an investment fund. Every investment opportunity provides a chance to learn something new, and with the landscape of funds out there, exploring options and learning create growth opportunities is a wonderful learning opportunity.

The first step here is in asking: “what is an investment fund, anyway?” Simply put, funds are managed stock listings that combine a number of assets under one umbrella. These trade in the same way that a single company’s stock would on the stock exchange, yet the underlying asset that you own as an investor in a Blackrock, Vanguard, or iShares ETF or other fund is a blend of tens or even hundreds of unique company shares. Rather than working to create a portfolio that tracks the market’s rise, you can invest in a fund that is managed by a team of industry professionals who are experts in evaluating market movers and economic trends.

For instance, there is much buzz surrounding the technology sector these days: Everyone wants a piece of the action when it comes to the amazing market penetration of companies like Amazon, Facebook, or Google (the mythical three that are almost cliché in investment advertising). While online ads will tell you that these companies are on a near-permanent rise (perhaps rightly so) investing in stocks that trade at $3,000+, $300+, and $2,000+ per share, respectively, can actually set a retail investor up for failure without sensible portfolio diversification measures in place.

This is where an investment fund can act as a powerful ally. A fund grants entry to even small portfolio owners, locking in the strong growth factor while eliminating much of the risk that comes with the territory of individual stock picking. Of course, like all commodities on the market, funds can lose value in the short term, but they are virtually unbeatable over the five, ten or fifteen-year timelines.

Total Market vs. Sector Specialization


The real choice that fund investors must face on a regular basis is where to allocate their funds when it comes to the big picture. While it’s always a good idea to invest directly in companies you believe in, when it comes to investment funds, the big picture acts as the driving force behind great investment opportunities.

Rather than analyzing market metrics and earnings reports for unique companies, relying on big picture reporting about the state of the energy sector, real estate, or technology landscape more generally can help you direct capital into unique funds that deal in a balanced portfolio of sector-specific assets.

Real estate is one space in which estate planning professionals often suggest placing a robust interest. John Foresi from Venterra Realty and professional realtors all over the world agree with this sentiment. Many investment professionals find that the dividend capacity of the real estate market far outperforms virtually all other sectors on a routine basis, and the increasing price of real estate in the United States and worldwide will continue to provide a valuable boost to the underlying commodity price of any REIT holdings you may be considering as well.

Sector-specific holdings are a phenomenal way to boost your earnings and coupled with total market holdings (an S&P 500 index fund, for instance), retirement planning is often simplified down to a question of time rather than a growth factor. The S&P 500 index has made annualized gains of approximately 10-11% since 1926. Similar growth factors hold true for other index measuring funds, and therefore over the course of a long-running retirement plan, you can expect to double your principal five or more times, depending, of course, on the start date of your portfolio in relation to your eventual retirement.

Investment funds provide the best structure for retirement planning, bar none. Adding this stability is the best way to hedge your portfolio for other, riskier strategies to create short-term capital gains while keeping one eye locked on the long future ahead.