Not long ago, we wrote about the Bitcoin Boom. We said it was a gamble rather than an investment. And we were right.
Bitcoin peaked at $19,000 in November, crashed below $6,000 at the start of this month, and has since rebounded above $11,000.
The graph (right) shows its value over the past month, and reminds us of the old catchphrase from the Magic Roundabout: “Boinggg!” said Zebedee.
With that in mind, you might enjoy this three-minute ‘commercial’ for Bitcoin, from Late Night with Seth Meyers.
Bitcoin’s closest cryptocurrency rival is Ethereum. Its inventor, Vitalik Buterin, recently tweeted: “Cryptocurrencies are still a new and hyper-volatile asset class, and could drop to near-zero at any time. Don’t put in more money than you can afford to lose. If you’re trying to figure out where to store your life savings, traditional assets are still your safest bet.”
If cryptocurrencies are too risky for your taste, you might like to know what else is going on in the investment world.
Here’s the market summary from Dimensional showing the last quarter of 2017, at a glance. All those green arrows look good, right? As you no doubt know, past performance is no guide to future performance, but stocks and bonds do appear to be moving in the right direction, don’t they.
And here’s a graphic reminder that you can safely ignore the news and stick to your long-term investment plan. By looking at the headlines (especially the UK headlines), you can see the overall trend is upwards whatever the media say.
What does this mean for you?
- It’s pointless trying to understand financial markets by tracking the daily media headlines
- Start with a strong philosophy and understand the drivers of return over the long term
- Diversify broadly, because it can help reduce issue-specific risk and increase consistency of outcomes