Diversify Into Different Asset Type’s Like A Boss With The Stock Market

The stock market such a dynamic way to invest.

Because the stock market allows us to jump into an infinite amount of industries and most asset classes are represented.

What is it you want returns from? Gold? Bitcoin? Whatever your answer is, your interests can be served by the stock market one way or another.

Let’s take a look how you can gain from various asset types via the stock market

1. Gold

“When paper money systems begin to crack at the seams, the run to gold could be explosive.” – Harry Browne

Gold is renowned for being a top-notch safe-haven. As well as a powerful hedge against inflation. The price of gold mining stocks tends to correlate with the price of gold.

Examples:
Centamin (LSE:CEY)
Goldcorp (NYSE:GG)

2. Oil

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Oil is possibly the most strategically important commodity available. The economy without oil would simply break down and our personal lives would take a major hit too.

Again, the price of oil stocks tend to correlate with the price of oil so if you don’t enough spare cash to find undiscovered oil, drill & distribute it efficiently, then buying stock in an oil producing company is a good shout.

Examples:
BP (LSE:BP)
Saudi Aramco (Awaiting IPO)

3. Property

“It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my standpoint, and I just love real estate.” – Donald Trump

“You make money from property and do business for fun.” – Alan Sugar

Apprentice-boss quote beef aside, property is known for being THE ultimate investment, especially in the U.K. The fact that there has been no loss for (residential) property over any 5-year period since 1973 supports this.

Real Estate Investment Trusts (REITs) own property portfolios and trade on the stock markets. They are obliged to hand out 90% of income to shareholders every year.

Another way to benefit of bricks and mortar would be to invest in a property building company or a mortgage lender.

Examples:
British Land (LSE:BLND)
Taylor Wimpey (LSE:TW)

4. Cash

“Cash is King” – The Richest Man in London. This quote has no owner so I’m claiming it.

I won’t lie, conceptually this is quite odd but keep with me. Banks look to make profit from people trusting them with their cash. The more cash we hold in the bank as a country, means more money for the banks to flip.

Though, I’m not saying banks increase in profitability as they receive more cash from customers. I am saying that cash is central to the banking system. So you can make money from cash as they make money from cash.

Example:
Lloyds Bank (LSE:LLO)

5. Bitcoin (Cryptocurrencies)

A lot can be said about Bitcoin right now as  August 1st looms. Something about Segwit, BIP148 and hard forks etc. I wish I could explain it.

Cryptocurrencies and blockchain are a new type of asset. No one knows how it will end but the insane growth of the sector in such a small space of time cannot be ignored. Bitcoin is currently at £2146.73 and in January 2013 it was less than £10.

Tech-guys mine bitcoin online with powerful hardware. The hardware has to keep getting more powerful to make mining profitable. So instead of mining or buying bitcoin, how about the companies that supply the mining software?

Examples
Nvidia (NASDAQ:NVDA)
AMD (NASDAQ:AMD)

6. Yourself

We are always encouraged to invest in ourselves which is purposeful advice. Let’s see how we can adapt this to the stock market.

Firstly, if you work for a listed company, then it should follow that the work you do is meaningful and is helping your progression (if not, think about leaving). Equally, you should believe that the company will have long term success (if not, think about leaving).

So how about intensifying the relationship and buying a small share in the business that you work for? You’re investing in yourself by being at a great company, the great company is investing in you and you’re financially investing in the great company.

Another way to use the stock market to invest in your self would be to invest in a company whose services or products you use to be productive. This could be a publishing company that provides you the books you read or a education company providing you with a course; investing in these companies are an indirect investment in yourself.

Examples:
Pearsons (LSE:PSON) – Educational courses and publisher
Microsoft (NASDAQ:MSFT) – Productivity software and hardware

Wrap up

Buying shares allows for strong diversification and lets you benefit from different types of asset.

Disclaimer

 

The Legendary Story of Barcadi🦇

I’m a big fan of Barcadi. I’m a big fan of rum.

I’m a big fan of alcohol but let me not lose focus here.

Whilst I knew Barcadi was one of the biggest spirit brands in the world, I didn’t know that it was privately owned by the Bacardi family. Nor did I know that the family was exiled from Cuba and all of their assets were stripped by Castro’s goons soon after the Cuban revolution.

Thank @BCasual_YT for that information and find out how they got back to dominance by watching the video below

I wonder if they will ever go public? or be bought by another company. I like to think I could be a co-owner some day

Please drink responsibly.

Entrepreneur Inspiration: Original Flava

The entrepreneurial spirit was in full swing on Thursday as I ventured southward to check out Original Flava’s cookbook launch party in Herne Hill.

Brothers, Shaun and Craig have been wowing the masses across the board with their simple approach to classic and innovative, amazing Caribbean dishes.

This was a unique event which included an art exbo, music, tasty dishes, insights behind the book and unlimited rum punch. The rum punch was everything I look for in a drink so I made sure I had my fair share without going crazy.

What’s really going on here? What is the meaning of this post?

Well I was astonished to find out that these guys started on this path in March 2016. Just over a year later they and gained over 180k followers on social media and have self-published their own book.

If this isn’t motivation then motivation does not exist.

Go after your success without delay. Whether its investing, starting a business or getting the best job you can get.

Do support the book if you can (I ordered mine on Kickstarter so should arrive soon), these guys have provided a lot of quality free content online and the inspiration they provide is priceless.

Compounding Success With Bonds on WiseAlpha?

Earlier this year I decided to support the WiseAlpha crowdfunding raise on Crowdcube as it is the type of business that gets my juices flowing.

Disruptive, innovative, democratizing, fin-techy. No one says fin-techy but everyone should get it. The platform allows anyone to get involved in high yield corporate bonds from as little as £100.

I approach all new investment platforms the same way, start cautiously then increase my holding as I become more comfortable. I have split £300 between 3 bonds. This should gross me roughly £21 a year which is about 7% give or take.

If things go well I will obviously add to my portfolio. If things go not so well the n the worse that can happen is a £300 L.

I learn best by doing, bonds can be tricky to understand so WiseAlpha is perfect for me to get to know bonds more thoroughly whilst adding to my passive income.

Have any questions about my WiseAlpha experience or any other investment plans? get at me  on Twitter.

Disclaimer

6 Point Guide To Why Stock Market Investing Is Not Gambling

I find this topic boring.  Too many people think that investing in stock is gambling so I thought it would be make a good post. I hope not to bore you.

Google your own definition of Gambling if would like, my definition is below

Gambling: placing a stake (wager) on a game of chance with the hope of a positive outcome.

Don’t be confused with the casual use of the word ‘gamble’ which is often chosen to describe any action or situation involving risk. It is a gamble to drink 10 shots of tequila at 1am when you have work the next day but this is not gambling now is it?

Here are the 6 points

1. Regulation

The gambling industry is regulated by the Gambling Commission. The stock market is regulated by the Financial Conduct Authority & the London Stock Exchange Group. Nice easy start.

2. Time frame

When gambling, it’s usually a bet on a one-off event e.g. who will win the fight? Who will be top goal scorer in the tournament? Will Donald Trump be impeached during this office? The stock market isn’t so time sensitive, when you make a stock market purchase you can keep the stock or sell it whenever you want, which segway’s nicely to the next point.

3. Ownership

You enter the stock market by purchasing shares of a company. Some pay a dividend and some don’t. either way, you own a tiny piece of a company. Gambling has no answer to this. At best, a casino can give you chips to cash in. Weak.

4. Team Goals

Wouldn’t gambling be more fun if you didn’t know the house wants all your money? They want everything from you. How ever well they try to dress it up. It’s you vs the house with rules that they make and odds that they decided. No team, your nightmare. Now if I purchase shares in HSBC, the board have an obligation to try and make me happy as a shareholder. They want HSBC to succeed as do I. team goals fam.

5. Minimising L’s

Both the stock market and gambling involve taking loses. The big difference though is with the stock market you can control and automate what your loses will be. It’s called a stop-loss order. Usually with gambling you either win money or lose everything you put at stake. W or L. there are some exceptions: online sport betting now has cash out options, the zero on a roulette wheel (although this is such a con the zero is not included in the odds your betting on but It can still take halve your stake!) etc.

6. Diversification

You can buy multiple different stocks to de-risk your portfolio. Ever tried a multiple bet? Your odds generally get worse. The more you gamble, the more money you put to risk

Summary

The stock market and gambling both involve risk. this does not make them the same. Leaving the house involves risk as does smoking cigarettes. Gambling should be for entertainment purposes if done at all. As gambling mostly is a waste of money and can be addictive I’m against it and do not encourage it. On the other hand, the stock market is a great way to build wealth and increase assets.

With such similarities can the two be combined in a worthwhile way?

Buying gambling stock

Instead of gambling yourself, why not try to profit from those that do. Some notable public betting companies are below

  •  Ladbrokes Coral Group (£1.13 per share*)
  •  PaddyPower Betfair (£80 per share*)
  •  William Hill (£2.53 per share*)
  •  The Rank Group – owner of Grosvenor Casinos and Mecca Bingo (£2.27 per share*)

(*Please note, these prices are correct at time of publishing this post)

Spread betting

This is betting on the price movement of a financial asset. I have not tried this so I can’t say too much. It’s basically betting on how much a financial assets price will change aka gambling.

Disclaimer

Top Tip For Stock Investing With Small Amounts

So I just saw a very insightful article on Investopedia that I needed to share.

The article is titled “I have only $500 to invest, am I limited to buyng only penny stocks?”

For me, the meat of the article was around the danger of commissions and trading fees at low levels of investment.

“remember commission fees act as negative returns, so do try to minimize them as much as possible. For example, if the commission is $10 per trade, after making one trade with your $500, you have only $490 to invest – in other words, you have already lost 2% on your investment. This means that to break even, your stock will need to go up by roughly 2%.”

This is something I can relate to. Having previously paid £12.50 per trade. I now only pay £3.95, which feels so much better.

You can see the article in full here. Enjoy.

Passive Income For June: Patience Is Key

Man, I’m so glad to be a patient investor. Patience is my secret weapon to fuel the growth of my passive income.

My passive income can be low now but with patience I will watch it grow for years and years.

In June I took in a modest sum of £33.70. This was actually one of the good months!

Source

Amount

Dividend

£26.10

Bank

£3.00

RateSetter

£0.90

PropertyPartner

£3.70

Other

£0.00

Total

£33.70

As shown, the bulk of the £33.70 came from stock dividends. Theres something so sweet about dividends. being paid for owning part of a company – how?

Sadly, not all months are like this as most dividend-paying companies  pay out quarterly at the most.

The £3 from the Bank is the monthly reward for chosen current account.

RateSetter really is a strange one. Although 90p income isn’t anything to blog about. Along with the interest generated, I also received £86.56 of my own money back to reinvest (or withdrawal if I felt that way). I will be posting a full review of RateSetter soon but you can see for yourself in the meantime by clicking here.

Income from Property Partner was decent enough.  I’m hoping to see a nice increase on next month if I am able to secure all of my enhanced dividend pre-orders.

So theres month one complete. £33.70. Im happy, many will be underwhelmed but I remember when my passive income was £0, so I’m good. With patience I will continue to grow my portfolio and monthly income.

Do you know a strong source of monthly income that I should be tapping into? let me know  below!

Disclaimer