Appreciating appreciation and depreciation in your portfolio
Understanding how the value of your assets change over time can significantly impact your investment strategy.
Just as some items in your home may increase in value (like fine wine or that comic collection), others may depreciate (like electronics or fast fashion items).
If you have the following assets, they’re likely to appreciate over time:
- Real Estate – Historically, real estate has been a net positive asset (especially in our current environment), even though the market has its ups and downs.
- Quality Stocks – Investments in well-established companies or those in growing industries have the potential to appreciate significantly. This includes dividend-paying stocks, which can provide income as well as appreciation.
- Retirement Accounts – Contributions to retirement accounts like 401(k)s and IRAs can grow over time, thanks to compound interest and tax advantages.
Here is a short list of a few assets that may depreciate:
- Vehicles – New cars can lose a significant portion of their value in the first few years. Choosing a reliable used car can sometimes be a better option from a financial standpoint.
- Technology and Electronics – Rapid technological advancements can make gadgets obsolete quickly, making them less valuable.
- Fashion and Apparel – Fast fashion items often lose value quickly and do not typically have long-term investment potential.
Understanding these trends can help you decide how to spend your money in a more future-thinking way.
It’s not about being a miser. It’s about striking the right balance between appreciating assets that can secure your financial future and depreciating assets that fulfill your current needs and lifestyle.
If you want to learn more about how these factors can influence your portfolio and financial goals, I’m here to help.
Let’s discuss strategies to help you get the most out of your investments and minimize losses, book a 15-minute consultation and chat about your plan, it’s easy – just click the buttons below.
