Recently, a Venture Capitalist commented “this crowdfunding and online investing services is a great idea, but why would people want to start investing with the most difficult asset class, i.e. risky startups.” Of course, the idea of startup crowdfunding has been to get more money into important growth companies and help investors diversify risk among several companies. But this Venture Capitalist still has an important point. Startup investing and especially investing Venture Capital type companies is a risky business. And any investor who invests in startups must also consider his portfolio as a whole.
Real estate is a traditional asset in which to invest. Most people have some experience to invest at least in their own house or apartment. But real estate investing has its own risks too, especially if you just have one house in one location. Real estate crowdfunding has come to help to diversify investments. If you invest part of your wealth in startups and growth companies, real estate can represent another kind of asset in the portfolio. Real estate crowdfunding can also help to diversify investments across several properties in different locations (even countries). That way, your investment doesn’t depend only on prices in London, Berlin or Hong Kong, but it is a portfolio of many locations.
No investment is risk free. It is always important to evaluate different alternatives and also understand your individual capacity to bear risk. Typically a good investment strategy includes diversification of investments to several assets and the same applies with crowdfunding: It is better to diversify investments into different kind of assets and also to different geographical areas and several models.
Crowdcitee specialises in international real estate crowdfunding, a process that is already popular in the US. Crowdcitee presents opportunities through different properties in global locations and the chance to diversify and strengthen investment portfolios.