Perhaps it is my age, or the fact that I have been in the stock market for roughly 30 years, and so when it comes to making money, and understanding money, I feel I have a very good handle on it. When it comes to business, and understanding how they make money, and what that means for investors like myself, it is not a hard thing to figure out and understand. Nor are the inner workings of the markets, and the numerous strategies one can employ to reduce risk, mitigate loss, and grow income. I like fiat money. I have done well for myself over the years with it. I said, "Perhaps it is my age." That is, I have only recently gotten involved with some cryptocurrency investing. And I like it. I like the potential of it. And where before I was unsure if it would be just a fad or a long term new asset class, I think there is a space for it. While it may not work or function in the same way bonds do, or stocks, or precious metals, I think it can serve more than a few purposes both in storing of wealth, and commerce. I know what I know is my point. Crypto is far more popular and familiar and attractive to younger people. I may know a lot more about crypto at some point. But I know fiat VERY well. I have said, as I have begun exploring investing more into cryptocurrency, that if I were to have enough luck (a word I never use in the stock market) to become among the crypto millionaires, my interest would not be to hold the cryptocurrency. Of course I would hold some of it, and would continue to explore new areas within this asset class to research and invest. But more likely than not I'd pull most of my money out and put it into stocks where dividends can be earned and where (to my mind) outcomes are far more determinable and predictable. As it stands right now, I can tell someone EXACTLY why the share price of say, Walmart is what it is. I can use fundamentals and other information to make a seasoned decision as to what I think the direction of the share price will be. AND I can ascertain exactly where it is that my dividend that they will pay me will come from. With cryptocurrency currently, I am not able to do that. Even looking at MOST price predictions and market analysis when it comes to cryptocurrency, what I do not see is FUNDAMENTAL analysis. But rather TECHNICAL analysis. And while that is helpful to a guy like me who understands certain technicals, it is not as helpful to a guy like me who also understands the importance and necessity of fundamentals for anything of value to have and MAINTAIN value. When it comes to money, fundamentals are everything. Assets move for a reason. And fundamentals tell you the very important "why." Take a recent example like GameStop shares. The stock did not, and was not moving on fundamentals. It was pure speculation and manipulation. Investing in something like a GameStop stock, ignoring the fundamentals, is akin to yanking the handle on a slot machine and hoping the random number generator is on your side in that moment. It is not a way to create lasting wealth. And even if you take the gamble and GET some wealth... You don't stick around. You take the money and run and put it into something more sound and lasting like a Walmart share. At the end of the day, from where I stand now, if "crypto millionaire" can be added to my resumé at some point, it is still going to be fiat money that reigns supreme for me. And at the end of the day my purpose for investing in any cryptocurrency is to increase the value of my real money. This is just my two cents, for whatever that is worth.
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5 comments
Crypto will have a place and purpose in the general scheme of investments. I look at it as a means of diversifying one's portfolio.
Right now I am allowing for about 1% of my entire portfolio. I may allow up to 5% at some point. But likely never more than that. But then, I am even being (probably overly) cautious in the stock market, having shifted my positions 60% cash and 40% securities. Technically I suppose I am supporting 59% cash, 40% securities, and 1% crypto.
5% is a good number. I've seen investors and financial personalities have 5% of their portfolio in crypto. I'm aiming for that number as well.
I think so too. I think it is a solid percentage. Keeps risk down, and while losing anything is never fun, losing 5% is not the end of the world.
True that.