Individual Stocks, Real Estate, Private Equity: Where Do They Fit?

Kyle addresses a question he frequently gets from clients -- do you invest in individual stocks? What about alternative asset classes like real estate or private equity? While Kyle isn't against individual stocks or private investments, most of his investing goes towards ETF's and mutual funds, where there is a higher probability that they will behave a certain way over time due to the diversification inherent to a fund compared to an individual security. That said, it's all about the plan, and Kyle always asks the question: where does this investment fit into the plan? Some clients may be focused on building their core nest egg, the portfolio that will provide income for them during retirement and is meant to last for the entirety of their life after work. Other clients may have a comfortable amount saved in their portfolio for this purpose, and may want to invest excess funds into higher growth assets that have the opportunity to generate significant wealth in the future. These clients have the ability and tolerance to make higher risk investments. Besides risk tolerance, the decision to invest in individual securities or private investments also depends on options. As part of the planning process, Kyle also looks at the liquidity of the portfolio -- how easily and quickly things can be sold to generate cash for other purposes. Owning real estate has the potential to generate big returns, but it also tends to be rather illiquid, potentially slow and difficult to sell. A client that needs flexibility and options, therefore, needs a portoflio that is more liquid, so that they can generate cash to handle unforeseen emergencies, or perhaps take advantage of unexpected opportunities. So the next time you hear a hot tip about an investment fund, or you feel FOMO because someone you know sold a piece of real estate for a large gain, think about your plan, and how an investment like that would fit into your portfolio built around your unique circumstances. As Kyle likes to remind clients, there are always more opportunities. Just because it's not the right time to invest in something now, there will more opportunities to invest in something later. Connect with Kyle Email: kyle@murphyfingroup.com Web: https://www.murphyfingroup.com LinkedIn: https://www.linkedin.com/in/kyle-martin-cfp®-aams®-05033352 Securities and advisory services offered through Commonwealth Financial Network, Member www.FINRA.org/www.SIPC.com, a Registered Investment Adviser. Fixed insurance products and services are separate from and not offered through Commonwealth. The financial advisor(s) associated with this material may only discuss or transact business with residents of states in which they are properly registered. Please check FINRA's BrokerCheck for a list of current registrations. No offers may be made or accepted from any resident outside these states due to various state requirements and registration requirements regarding investment products and services. The information discussed on this program is for educational and informational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. All investments involve risk, including the loss or principal. No strategy can assure a profit, protect against loss in declining markets, or guarantee that any objective or goal will be achieved. Please contact your financial professional for more information specific to your situation. Murphy Financial Group 310 S Hale Street Wheaton, IL 60187 (630) 523-0410 Review our Terms of Use: www.commonwealth.com/termsofuse.html Past performance is no guarantee of future results. Murphy Financial Group does not provide legal or tax advice.