In 2022, investors in crypto currency had a rude awakening: what goes up, goes down. And in some cases, investors in crypto currencies lost a substantial portion of their investment.
Crypto currency and blockchain technology have merits, but is owning cryptocurrency part of a well-balanced, prudent portfolio? If an investor doesn’t invest in currencies like the British Pound, the Euro, or the Yen, why would investing in a crypro currency have appeal? At its core, it is a currency, and investing in currencies is different than investing in stocks and bonds.
Since we started as Fee-Only®, You-Only® financial planners in 2006, we’ve seen recessions, new financial products, and the rise of crypto currency sway investors. We never believed crypto to be a prudent investment. As many may have seen in the news, FTX (one of the largest crypto exchanges) filed for bankruptcy in November, 2022.
Our philosophy at EVOadvisers involves taking a prudent, long term investment approach to investing. We don’t follow short term investment trends. But, risk is a fundamental part of investing. We believe index funds and can help an investor to diversify without taking on unnecessary risks as they pursue their investment and life goals. Cryptocurrency investing may not be a good fit for an investor following such a strategy, even though they can sound exciting. As Nobel Laureate, Paul Samuelson famously stated, “Investing should be dull. It shouldn’t be exciting. Investing should be more like watching paint dry or grass grow. If you want excitement, take $800 and go to Las Vegas.”
Jack O’Brien CIMA® is a Certified Investment Management Analyst educated at Chicago Booth School of Busisness and Virginia Tech. EVOadvisers is a fee-only financial advisor based in the Scott’s Addition area of Richmond, Virginia. EVOadvisers also has an office in Irvington, Virginia to better serve clients in the Northern Neck of Virginia. If you have any questions about financial planning and would like to talk with one of our Certified Financial Planner professionals, check us out at www.evoadvisersdev.wpengine.com or call (804)794-1981.