Some people are trying to buy up as many Bitcoins as they can afford. Some, like millennials, are so thoroughly banking on Bitcoin and cryptocurrencies as "the currency of the future" that they are investing almost exclusively in cryptocurrency. Yet, is that a financially smart thing to do?
Most investors and brokers will tell you that banking on any one thing as your sole investment is not smart at all, no matter how much that one item is currently worth. What is more, Bitcoin is a minute-by-minute highly volatile investment, and one which requires a lot of money to buy into. So, how can you plan for retirement and include cryptocurrency in your investment portfolio? What is the smartest approach to this investment conundrum? The following information will help.
Include Cryptocurrency, Just Do Not Invest Exclusively
Yes, by all means, buy some cryptocurrency. Nobody knows for certain if it will definitely be more valuable than diamonds and gold by the time you retire. Truth is, nobody knows if your technology stocks and your money market IRAs are going to be worth a lot either, but you buy into them just in case. If anything starts to tank, you sell it right away to avoid losing money. You can do the same with cryptocurrency, but with fewer penalties when you withdraw your actual cash from the blackness of the crypto-world.
Wait for Cryptocurrency Prices to Drop
Cryptocurrency prices drop by the minute, the hour, the day, and even the month. You have to be hyper-vigilant to spot when the "coins" or "dollars" are low enough to make it worth buying. Do not buy into it just because someone says that it will just keep going up and you will miss out. That person does not know any more about the fluctuations of cryptocurrency than you do. Wait and watch, then buy it low, just as you would if you were buying stock.
Bitcoin Retirement Planning
If you have bought into cryptocurrency up to fifty percent of your overall investment portfolio, you may want to talk to a cryptocurrency advisor. These advisors can help you determine how much to sell/exchange, and how to dump your cryptocurrency for enough profit when you reach retirement age. (Of course, that is banking on the long-term survival rate of this investment.) If "crypto" looks like it might be heading the way of the dodo twenty years from now, it is time to sell and get out as fast as you can so that you still have some retirement money.
To learn more, contact a company like Bridge Advisors, LLC.