You have heard people around you talking about investing in a particular asset, be it stocks, bonds, or commodities. You have also heard significant terms like the S&P 500 index, Bitcoin, NASDAQ, among others, and you have been curious about what these things entail.

Before we get into the details of investing, we must understand the following terms;

  • An investment Portfolio is the basket of assets bought through diversification.
  • Diversification is the practice of buying a variety of assets.

As a young person in your 20s, this article will inform you on what assets are at your disposal for investments.

Types of Assets

Investing in the stock market exposes you to a wide variety of assets, but the main three assets are;

  • Stocks; involves buying partial ownership of a company
  • Bonds; are loans offered by investors to governments or other entities.
  • Commodities; are specific products available for investing, for example, investing in gold.

There are several ways you can choose to diversify your investments; they include;

Allocating Assets

One of the simplest ways you can invest is by using asset allocation funds that allocate a predetermined percentage between stocks and bonds. For example, if you invest in a 70/30 fund, the investment will be split as 70% stocks and 30% bonds, easing the burden of determining the investment amount for either.

The asset allocation strategy is part of a modern portfolio allocation theory that requires that you learn techniques in the field. It is therefore advisable that you consult a financial advisor for advice on how to navigate asset allocation.

Foreign Companies and Assets

Most investors like to stay safe and invest in products within their country’s boundaries. For proper diversification, it is advisable to invest in foreign companies. Depending on your location, consider investing in a company in another stock market. For example, you could find an investment opportunity in an RYD tooling injection molding company listed in a stock market outside your country. Explore the options, and take the opportunity to learn.

Investing in ETFs and Mutual Funds Al-together

You can customize your investment portfolio by investing in a mix of various exchange-traded funds (ETFs) or mutual funds. Buying ETFs and mutual funds provides more diversification than buying one or two stocks.

You can broaden your holdings by investing in at least six distinct ETFs or mutual funds. Consider not investing more than 20% of your money into any of them. You can spread the risk among various financial products in this way.

Varying Investments By Company Size

Another way of varying your investments is by diversifying the companies you invest in. Consider buying a mix of stock from both well-known companies and lesser-known ones. Create a balance by investing in both mature stock and risky stocks.

Risky stocks are those of companies that have recently issued an initial public offering, while mature assets are those that have stabilized and have been available to the public for some time now.

Investment Ideas For Diversification

Now that we have covered how you can invest let’s delve into investment ideas for you. These include;

The S&P 500 Index

The S&P 500 index provides an annual growth rate of around 10% returns since 1926; this is a good investment as it is growth-oriented, an aspect that a young individual like you should have a keen focus on.

Real Estate Investment Trusts

These trusts offer you a diverse portfolio of real estate properties to invest in at once and are more beneficial than investing in a single property. The advantage to this is that the amount you can invest in could be as low as a few thousand dollars.

Investing in Robo Advisors

These are online platforms that automatically perform all the investments for you. Just place your investment amount, and the system will automatically create a portfolio and manage it for you. The upside is that you do not need to learn much about investing to use such systems.

Buying Fractions of Shares

If you cannot afford the full stocks of a company you’d like to buy into, consider purchasing a fraction of the stock for a portion of the price. Buying this way can also allow you to have multiple investments into companies.

Buying A Home

Consider purchasing a home as it appreciates over time. However, you need to assess the chances of living in that area over the years of your life.

Opening a Retirement Plan

A retirement plan will help you in saving up over the years. If you save $10,000 annually from your 20’s, you will have more than two million dollars by the age of 65, but if you wait till you’re 35 to start saving up, you will yield lesser results. Saving up using the retirement plan also helps defer tax and will bring more returns than a taxable investment account.

Debt Payment vs. Investment

The chances are that you have some form of debt in your 20s, such as student loans or car loans, etc. Ensure that you pay off the minimum monthly payment and create a balance by investing the rest of the money; otherwise, debt will reduce your cash flow for longer than you plan.

Improve Your Skills

Your specialty will be a significant source of the money you use to invest, so it is wise to improve your skill level. The more skillful you are, the more you are paid, and the more money you have for creating multiple investments.


As a young individual, the amount of money available to you is limited, so you should research and choose two or three investments wisely. Take your time to learn more about investment when you are young, and this is because the future looks brighter for you this way.