Danny Young of Adel, Georgia is a seasoned wealth financial service provider with an impressive track record spanning over four decades. With his array of skills and experience, Danny Young is dedicated to helping retirees navigate the complexities of financial planning. In the following article, Danny Young discusses the most successful ways to build wealth by diversifying an investment portfolio.
Building wealth successfully doesn’t just come from simply making the right investments, it comes from making the right mixture of investments.
Diversification has long been viewed as an essential investment strategy. A carefully considered investment portfolio, even during volatile economic periods, helps to potentially increase financial returns in both the short and long term.
Danny Young of Adel, GA explains that Americans typically see real estate as the best long-term investment, but a diversified portfolio would also include a range of investment approaches such as in stocks, bonds, and savings accounts.
Millionaires diversify. The average investor can, too.
Diversification Basics
A diversified portfolio includes a mix of investments that vary in levels of returns and risks. The overall goal is to seamlessly enhance a portfolio’s overall longevity and worth. Having a portfolio that does not prioritize diversification can increase the risks, reports Danny Young of Adel, GA.
Aiming for effective portfolio diversification is one way to spread investment wealth around hedge bets. Through including a wide range of investment types and sizes that cover different types of industries, a portfolio will stay more financially secure overall if one investment fails.
Danny Young of Adel, GA says that fund managers and financial planners often swear by diversification as one of the most responsible approaches to investing that also comes with the potential for higher rewards.
Common Strategies
Some investors are guided by impromptu reactions to financial news or knee-jerk reactions to inflation numbers and industry trends. Others simply view it as an art form.
For those who practice investing as an art, a diversified portfolio is their finest tool. And like any accomplished artist, it takes both talent and practice to become an expert.
Diversification isn’t foolproof either. Danny Young of Adel, GA explains how, like all investments, goals for returns are not guaranteed and not all losses can be prevented. However, there are a few relevant strategies that are particularly valued by those who practice diversification.
Branch out Across and Within Asset Classes
Danny Young of Adel, GA says that before attempting portfolio diversification, investors often review the available asset classes and their individual pros and cons regarding risks and returns.
Such assets may include cash and property, as well as fixed-income options like bonds, equities, and stocks. Having a diversified portfolio commonly means investing through several different classes, but it can also mean having at least two different assets in the portfolio.
Be Tactical
Danny Young of Adel, GA explains that a portfolio’s diversification should always be in flux. Strong portfolios change and expand over time, and it’s up to the investor to track and keep up with markets.
The strongest portfolios don’t just include different asset classes — they assess the underlying risks of individual investments and the portfolio as a whole. Investors need to have a thorough understanding of everything from company performance to historical evidence of how an asset has performed during times of inflation or recession.
Such histories may also provide information that guides both asset allocation approaches and how to spread the size of investment across assets, according to Danny Young of Adel, GA.
Get the Most Bang for the Investment Buck
Affordability should still always be carefully considered, even when diversifying. That means going beyond the actual investment amount.
Danny Young of Adel, GA notes that investors use financial advisors to help with their diversification approach. This usually comes with annual fees that cover everything from the cost of transactions and custodian fees to investment expense ratios. Fees should be factored into a portfolio’s total investment.
Tax efficiency should also be a part of the strategy. By tax planning while focusing on assets that come with potential tax advantages, investors take a proactive approach to future wealth building.
Other Strategic Investment Tips
• Go Global
Only investing in assets based in the U.S. means a portfolio is vulnerable to U.S.-specific economic risks. Diversification commonly includes stocks and bonds from foreign countries to spread out the risk.
• Think Outside the Box
Danny Young of Adel, GA says that stock and bonds are common investments, but diversifying a portfolio can mean looking into alternatives like commodities (gold, cattle, natural gas) or investing in real estate trusts where one owns a portion of the return from properties like apartment complexes and office buildings.
• Timely Goals
An investor’s tolerance of risk is typically related to their individual financial goals. If one has a 40-year plan for retirement or wealth building, their portfolio may reflect a greater financial risk tolerance, and more money may be invested in stocks than bonds.
Those who need to reach a financial goal within 10 years may be more conservative while allocating resources evenly between stocks and bonds.
Danny Young is registered with, and securities are offered through Kovack Securities, Inc. Member FINRA/SIPC. 6451 North Federal Hwy, Suite 1201, Ft. Lauderdale, FL 33308, (954) 782-4771 Investment Advisory services are offered through Kovack Advisors, Inc. Independent Retirement Professionals, Inc. is not affiliated with Kovack Securities, Inc. or Kovack Advisors, Inc. The information in this material is not intended as tax or legal advice. Please consult legal or tax advisors for specific information regarding your individual situation.
Asset allocations and diversification cannot guarantee profit or insure against a loss. There is no guarantee that any investment strategy will be successful; all investing involves risk, including the possible loss of principal.
