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Why a Property Portfolio can be a worthwhile Fixed Asset Investment

13/01/2020

In the wake of Brexit and the political uncertainty in the world right now, stock markets are likely to be quite volatile. The prices of stocks and shares can fluctuate wildly in a matter of hours and days, so if you are thinking about investing, you may need to look further afield, for example, at fixed asset investments.

What are fixed asset investments?

Fixed assets are assets which are unlikely to be changed into cash in the short term. This covers things like gold, plus other areas for investment such as commercial and residential property markets.

Gold is quite a stable asset and one which many people decide to move into, investment wise, when markets go into turmoil. On the other hand, while the price of gold is quite stable, investments in a carefully designed property portfolio can represent a better return on your money.

Investing in the property market

In its most basic form, investing in the property market can be as simple as buying a holiday home either here in the UK, or somewhere abroad. Another basic property investment tactic is ‘buy to let’, where you purchase a property with the intent of letting it out.

These sorts of investments are usually quite safe, but buying property abroad can still pose a big risk. A good example of this is the Spanish property market, which saw significant market growth between 1985 and 2007. Prices rose substantially, attracting more builders into the market and more foreign buyers. But then came the world financial crisis of 2007/8.

The crisis caused the Spanish property market to implode. Property prices today are still as much as 50% lower than they were in 2007. It is a sobering warning, and one of the pitfalls of investing in property abroad.

Diversifying your fixed asset investments

There are more options open to you in terms of fixed asset investments – for example, looking for government-backed projects is many investors’ favourites.

Investments in general, whether in property or some other commodity, are always made safer by diversification. Spreading your investments across different projects and different geographic regions tends to make financial investments safer.

People feel comfortable investing in bricks and mortar

Of course, as with any investments, there are no guarantees. Prices can go down as well as up, whatever the country. However, fixed asset investments in property are generally thought to be safer than stocks and shares, and can offer good long-term prospects for investors.

One thing you should always bear in mind is that, unless you are a financial professional, making investments of any nature is something that you should consider getting professional help with. If you are thinking of taking up fixed asset investments, talk to us here at Stable Rise.

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