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Investing money is something I’ve aimed to do since completing my emergency fund years ago. And these days, I tend to favor stocks as my investment of choice.
Investing in stocks can be a risky proposition. The market can be quite volatile, and through the years, I’ve seen my portfolio lose substantial value from one week to the next.
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I also know, however, that stocks have a long history of rewarding investors who stick with them for decades. Over the past 50 years, the stock market has averaged an annual return of 10%. If you were to invest $10,000 today at that same return, in 50 years from now, it might be worth about $1.17 million — no joke.
To be clear, I wasn’t always comfortable investing in stocks. It took years for me to talk myself into accepting the risk that comes with them. But to this day, there are certain investments I won’t even consider adding to my portfolio. Here are three that fall into that category.
1. Crypto
As someone who owns her fair share of stocks, I’m no stranger to risk. However, to me, cryptocurrency investing is just way riskier than stock investing for the sheer reason that it hasn’t been around as long.
There are stocks in my portfolio whose issuing companies have been around for more than 100 years. Bitcoin, by contrast, was only introduced to the public in 2009.
It’s hard for me to know how much staying power crypto has. That puts it into the category of being a risk I’m unwilling to take on.
2. Art
I like a classic painting as much as the next person. The Mona Lisa? I made a point to check it out when I visited the Louvre years ago.
But while I enjoy looking at art, I refuse to actually invest in it. And the reason is that I don’t know enough about art to determine whether a given work has the potential to gain value or not.
As a general rule, I believe that I should only invest in assets I understand. I don’t understand the finances of art.
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Heck, to some degree, I don’t always…
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