Alternatives to Bonds and Equities
Just Like in Life, in Investments, everything is not 0 or 1.
Between Bonds and Equities, there are two other options.
When it comes to asset diversification, there are only a few things that most people invest in or are even aware of. Equities, bonds, real estate... Private Equity, venture capital are also known to some extent.
In 2022, we witnessed how bonds can lose gains from a decade of returns.
We are currently witnessing a meltdown in the stock market due to the tariffs and other head winds in the US economy.
Between bonds and equities, there is a 6-8% annual average return difference at least.
But, what people don't know enough about is that between bonds and equities, there are 2 other options with increasing returns, increasing risk, increasing volatility.
Just like in life, in investments, everything is not 0 or 1, there are shades of grey in between ranging from 100% downside protection (indexed products), 20-30% buffer protection (structured index-linked), to fully variable/equities (no protection).
Traditionally, structured products had higher fees and complexity, but that has now changed with increased competition.
Also these newer age innovative products are backed by top 100 companies in the world, so the risk of you losing your money is even lower than placing them in banks.
The kicker is the growth could be tax deferred or tax free depending on which instrument you pick, making them a better option for anyone really, but especially compelling for the high income earners (>22% tax bracket).
Do you only invest only in bonds and equities ? To learn more about these other options and how they may fit into your overall portfolio, schedule a complimentary, no obligations 1x1 conversation and personalized review of your finances today at https://lnkd.in/g2nWPZBY.
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