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All staff will be checking their phone and email messages daily.*

Please call our Director of Client Relations, Pattie Brown, at 1-800-500-2525 ext. 117 or email Pattie at pbrown@trustlaw.com if you need any further assistance.

* You can also use this link to schedule a phone consultation with one of our attorneys.

Diversification in Your Portfolio

Depending on the purpose of a trust, a trust may be able to further sustain its’ life and generate additional income by investing the funds originally set aside by the grantor in a variety of investment tools. In order to generate additional income, a professional investor will seek to have a diverse portfolio established in order to mitigate any potentially large losses and keep your funds safe.

While the idea of hitting it big with one major investment is the dream of many, the reality is highly unlikely, thus, investing money in a wider range of areas is beneficial. While the investment team and trustee will be able to best assess the proper investments for your trust funds, each situation will differ and will be influenced by the risk the trust is willing to take as well as the timeline for distribution of funds needed.

Types of Investments

  1. Stocks: This type of investment allows you to buy a stake, or ownership right, in company. These tend to be the largest part of a portfolio but can be the highest risk depending on your amount of shares and the health of the company invested in. International stocks can also be an investment tool that provides higher returns, and gives access to a different market.
  2. Bonds: Unlike stocks, this investment tool is the investor lending their money to a company that pays back the funds at a specified interest rate over time. Bonds also generally make up a large portion of a diverse portfolio and help to balance out the risk sometimes taken with stocks.
  3. Real Estate: This type of investment, through various funds or a Real Estate Investment Trust, can be conservative and lower risk strategy that provides additional income by owning an interest in commercial real estate. The investor would own a portion of real estate, or various pieces of it, through a company, without taking on the risk of owning a commercial piece of property his or herself.
  4. Funds: Funds are a more broad type of investment, as they pool together different investments or securities, like the few discussed above, to generate income. The most common types of funds are mutual funds, which are a group of funds collected by investors in order to invest in securities and similar assets, index funds, which are focused on a specific market, and exchange traded funds, which are funds that also focused on a specific market but are traded like stocks and adjusted daily.
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