Should you include international stocks in your investment portfolio? If yes, how much? If no, why not?
And now, with the recent volatility, memories of those scary days still haunt many an investor that rightfully so, remains traumatized from that roller coaster ride from hell back in 2009. The thought that runs through many a mind in times of high volatility and high anxiety like we’re currently experiencing; is this going to be a repeat of 2009?
How much of a boost in net returns can financial advisors add to client portfolios? Well according to Vanguard, maybe as much as 3%.
John Bogle, the founder of Vanguard, recently conducted an extensive interview with a financial insider publication called Money Management Executive. In this no holds barred interview, Bogle shares his opinions and wisdom on index funds, ETF’s and alternative investments and how they are being used and marketed to the public.
The following definition of ‘fiduciary’ is taken from the Center for Fiduciary Studies, fi360 website:
If you are looking to diversify your investment portfolio, (and you should be) here are two alternative investment strategies worth considering. But first, full disclosure: We have absolutely no affiliation to the firms mentioned below and receive zero compensation or any compensation, financial or non-financial from these firms. At times, we will recommend and acquire these investments to add to our investment management clients’ portfolios. Both investments come with risk of loss, so you need to do your due diligence before investing.
Peer-to-peer lending has been popular in Europe for many years and it’s finally getting its due attention here in the states. The two leading companies in this space are Prosper and Lending Club.
By creating a virtual platform bringing together borrowers and lenders aka-peer to peer- outside the conventional banking system, peer to peer lending is surely going to become more and more popular as word spreads. NPR recently did a story on this new concept that you can read or listen to.
I had the pleasure of meeting one of the owners of Prosper at a recent breakfast meeting in San Francisco. His vision, strategy and track record left little doubt in my mind that this is an alternative investment that needs to be seriously considered.
Prosper for example offers 1, 3 and 5 year notes for investors with varying interest rate returns depending on the borrower’s credit score and overall risk profile. Monthly interest payments can be reinvested or deposited electronically into your checking account.
Lower risk seasoned returns at Prosper currently average 5.41% with higher risk notes earning 14.12% and higher. Investments in personal loans from qualified borrowers can be as little as $25. For fixed income investors seeking higher income, this could play a role in your portfolio. Being able to invest across different credit grades and estimated yields provides the diversity you need.
Perhaps it was my 3 years of experience working at Fair Isaac, home of the FICO credit score, that has me believing in this alternative investment so highly, yet peer-to-peer lending/investing in my humble opinion is the next big thing in the investing world. Check it out, make sure you fully understand the risks involved and see if it has a place in your portfolio.
Back in the day, I considered myself an ‘outsmarter’. It was the mid-80’s, I was young and carefree and believed, as did the vast majority of my friends and colleagues, that we had the winning formula for stock market success.
