I invest in stocks, but I wouldn’t touch these investments with a 10-foot pole.

Investing money has been a goal of mine since completing my emergency fund a few years ago. And these days, I tend to prefer stocks as an investment object.

Investing in stocks can be a risky proposition. The markets are quite volatile and over the years I have seen my portfolio lose significant value from one week to the next.

But I also know that stocks have a long history of rewarding investors who stick with them for decades. Over the past 50 years, the average annual return on the stock market has been 10%. If you invest $10,000 today with the same return, 50 years from now it will be worth about $1.17 million. It’s not a joke.

To be clear, I haven’t always been comfortable investing in stocks. It took me years to talk myself into accepting the risks that come with them. However, to this day, there are certain investments that I would not consider adding to my portfolio. Here are three that fall into that category:

1. Cryptocurrency

As someone who owns my fair share of stocks, I’m no stranger to taking risks. But to me, cryptocurrency investment is just method It is more risky than investing in stocks. That’s because it’s not that old.

In my portfolio, I have stocks whose issuing companies have been around for over 100 years. In contrast, Bitcoin was only introduced to the public in 2009.

It is difficult to know how durable cryptocurrencies will be. That falls into the category of risks I don’t want to take.

2. Art

I love classic paintings as much as the next person. Mona Lisa? When I visited the Louvre a few years ago, I made a point to check it out.

But while I enjoy looking at art, I refuse to actually invest in it. And that’s because we don’t know enough about art to judge whether a given piece has any chance of gaining value.

As a rule, I believe I should only invest in assets that I understand. I don’t understand the finances of art.

Heck, to some degree I don’t always understand. Art It’s like a modern painting that makes a million dollars when all you see behind the art are swirling lines on a canvas. Therefore, there is no point in adding artwork to my portfolio.

3. Real estate

I am invested in real estate to the extent of owning a REIT or real estate investment trust. Real estate investment trusts are publicly traded and to a large extent are very similar to stocks. However, I do not own any physical real estate for investment purposes, such as rental properties. One big reason is that I know I’m not capable of doing it.

Being a landlord is more than handing out rental contracts and receiving a rent check each month. There’s so much to do, but I don’t have the ability to do it.

On the other hand, owning stocks requires a minimal investment of time. Sure. You should research stocks before adding them to your portfolio. And I like to keep track of how my stocks are performing.

But this is nothing compared to the time it takes to oversee a rental property. So real estate is one asset I won’t be investing in anytime soon.

Choose your investments carefully

If you want to put your money to work, you need to become familiar with the asset you choose. Therefore, you can limit your holdings to investments that meet the following criteria:

• Risk is something you feel reasonably comfortable with.
• you understand how they work
• you have time to keep it

If you step outside this line, you could lose money. So while it’s a good idea to expand your portfolio somewhat, you’ll want to do so cautiously to avoid overdoing things.

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