Wednesday, January 18, 2012

Buying property to let III

Real Estate seems to be a good decision these days, for those investors seeking for safety rather than immediate gains. Investors tend to maintain their investments in areas that they know better. Stock exchange investors prefer to stick to their usual investments in that market rather than diversifying to other segments like Real Estate.

Diversification, if well managed, means a safer way of investing.

I recommend to have a balanced mix of types such as investments in Euros and US dollars for example.

This seems pretty basic but some people that recently contacted me had not paid any attention to this very basic fact.

There are many programs in the market for sophisticated investors to combine several types of investments according to each individual risk appetite.

Those theories have been used for several decades and they are effective. Nobel Prize Harry Markowitz back in the sixties generated his theories and tools to assist investors to create balanced optimal investment portfolios.

Some investors do not need to reach those levels of sophistication but rather to stick to basic principles such as definition of investment strategy (Return, time, and risk appetite/aversion, etc) and diversification.

For those deciding for Real Estate as a safe place to put their monies. We may recommend to define their level of investment and location

Combining these two simple variables is the key for a successful investment decision.