New relationship energy is real. The electricity you feel when you’re exploring potential partners can be exhilarating — maybe even scary at times. There’s the fear of the unknown, but also the opportunity to try new things, go to new places and cultivate new relationships. There’s a chance that a casual date could blossom into a strong, everlasting partnership.
The more I think about it, dating feels a lot like investing in alternative assets, which are non-traditional investments that include things like real estate, private companies and commodities. It might sound like a stretch, but for a guy who writes about investing for a living, it’s not.
Like many investors, when it comes to relationships, you’re probably most comfortable with what you’re most familiar with. Stocks and bonds are traditional investment options with which everyone’s familiar. And, by all means, they have their place in a portfolio. But they’re not all that’s out there. Just because you’re unfamiliar with something doesn’t mean it can’t be beneficial.
With that in mind, let’s explore four surprising similarities between dating and alternative investments that you’ve probably never considered.
Casual dating is about meeting new people, exploring your options and having fun. For some, it’s about the exposure to many new potential partners. For others, it’s about the freedom to meet other people without feeling tied down. Casual dating can be the best of both worlds.
A diversified portfolio is like casual dating in that you get to enjoy what all the different assets have to offer.
Stocks can expose you to the successes of individual public companies. Private credit can produce higher income than traditional fixed-income products. Venture capital offers the potential for outsized returns through investments in early-stage companies deemed to have promising growth potential.
Of course, you get the baggage too. Stock prices can decline, borrowers may not be able to repay their debts and a budding company, despite its growth prospects, might squander its potential.
With dating apps, it can be difficult to know which one you should focus your time on and which has the pool of people you hope to meet. With investing apps, too few give regular investors access to a diverse pool of investments. But that’s something SoFi, a personal finance company, is out to address with its new investment product, SoFi Alternative Investments, which gives you access to alternative assets run by knowledgeable asset managers.
SoFi offers a wide range of investing options and tools, from traditional assets like stocks and ETFs to robo-investing to IPO access and to, now, mutual funds, money market funds and alternatives. With its low minimum investments and all-in-one approach to finance, daters can take a page out of SoFi’s book when it comes to being approachable.
Like dating, investing includes both risks and rewards. While dating may let you explore many options, there’s also the chance that you’ll get trapped on an evening with someone who treats the waitstaff like dirt. Or you go exclusive, only to get rejected.
Investing offers the potential for long-term returns and wealth-building, but the risk of losing money is possible too. And losses can compound quickly if you put all your eggs in one basket.
Diversifying your portfolio with alternatives helps you reduce risk because the different assets perform differently. A portfolio of only large-cap tech stocks is going to perform differently than a portfolio of stocks, sector exchange-traded funds (ETFs) and exposure to real estate, venture capital and commodities. When you diversify your portfolio with alternative assets, in addition to traditional investments, it will help reduce the risk of a single investment hurting your portfolio.
Dating isn’t always a straight path to happiness. There will be arguments and fights. The lows might make you question the relationship’s viability, but they’re also an opportunity to grow closer.
Markets can be volatile, some more than others. Stocks might outperform one year and then crumble the next (this is where diversification can help). But if you’re committed to the long haul and believe that investment is right for you, strap in for the ride.
Market volatility is like the emotional ups and downs of a relationship. It can bring you down, but adjusting your investments during market downturns could play a role in influencing your portfolio’s performance when markets eventually rebound.
After years of dating the same person, you learn each other’s quirks and preferences and you feel safe and secure in each other’s company. During stressful times, and assuming you’re in a happy relationship, this familiarity is comforting.
Long-term investing lets you ride the ups and downs of the markets, as you give your investments time to grow. You build your position over time and you could be rewarded for your patience. Hopefully, you can forgive your portfolio when it has a down day and snaps at you.
Access to alternative investments has been limited to the wealthy for too long. But with SoFi Alternative Investments, SoFi offers a simplified way for regular investors to help build and protect their wealth with investment options beyond traditional stocks and bonds.
No need for accounts with multiple brokers to diversify with alts. Like a dating app that’ll give you access to a varied pool of potential dates, SoFi’s all-in-one finance platform lets you diversify your portfolio with ease and all under one roof.
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