<\/p>\n
\u201cIf you\u2019re seeing bitcoin on a bus, it\u2019s time to buy.\u201d<\/em><\/p>\n You might\u2019ve seen this advert doing the rounds on public transport. This probably won\u2019t come as a surprise to you but as someone whose job it is to help people invest for their futures, this ad sends a shiver down my spine.<\/p>\n Cryptocurrency is a fascinating and fast-growing area. It looks set to play some<\/em> role in mainstream payments systems but it’s level of importance is far from assured. It’s role as an investment asset alongside shares, property and bonds is by far the most questionable aspect of all.<\/p>\n Despite the hype and big numbers, right now \u201ccrypto\u201d remains a very smart technological solution that hasn\u2019t yet found a unique set of problems that only it can solve<\/em>.<\/p>\n If digital currencies were to suddenly disappear overnight, what impact would this have? It’d be safe to say that the world and its current systems would just carry on regardless.<\/p>\n Volatility<\/strong><\/p>\n As an investment asset, crypto appears to have no inherent value and this largely unregulated market seems very prone to manipulation (Elon Musk just has to whisper \u201cBitcoin\u201d and its price either flies or falls). Many financial commentators even go as far as likening it to a pyramid scheme.<\/p>\n All of this uncertainty is precisely why its price remains extremely volatile and it’s still the subject of so much speculation even now (Bitcoin originally launched in 2009).<\/p>\n Speculating on new markets is nothing new in itself but in today\u2019s very noisy and ultra-connected world, there are broader investor trends that concern me.<\/p>\n What’s driving all this speculation?<\/p>\n FOMO<\/strong><\/p>\n The Fear of Missing Out<\/em> is that part of our psyche that drives us to want to be part of the crowd.<\/p>\n So, if the herd appears to be having a jolly good time on the Bitcoin bus, the more compelled we are (and the safer it feels) to jump aboard to get a slice of the action.<\/p>\n Trillions have poured into cryptocurrencies in recent years and you can be sure that a large swathe of those investors have no idea what they\u2019re buying or the risks involved.<\/p>\n As well as being lured in by clever advertising, younger investors are being influenced by an increasing number of unregulated investment gurus on social media channels giving questionable “advice”. Many of them hype up cryptocurrencies and describe them in the same way you might shares in a company, which is pretty worrying as they’re anything but.<\/p>\n There’s a huge momentum and machine behind crypto but if it’s future role in our lives ends up being limited, what we\u2019re basically looking at is the makings of a bubble. And history tells us that fast-growing markets with no underlying substance – Dutch tulips, early Dotcom companies and the US Housing market being prime examples \u2013 always end up bursting.<\/p>\n I\u2019m not smart enough to know what the future holds for crypto. But what I do know is that you shouldn\u2019t invest in something just because everyone and their granny seems to be.<\/p>\n Understand it for yourself as best you possibly can and form a considered judgement.<\/p>\n Gamifying investing<\/strong><\/p>\n It\u2019s never been easier or cheaper to invest in markets. There’s now a raft of investment platforms and apps that allow you to invest your hard-earned savings, ISAs and pension funds in all sorts of weird and wonderful shares and funds.<\/p>\n I\u2019m probably starting to sound like a grumpy old man yelling from his porch but the issue I have with these platforms is the way some are gamifying<\/em> share-trading i.e. marketing investing like it’s a fun past-time that anyone can enjoy and master.<\/p>\n Investing is simple but that\u2019s not to say it\u2019s easy, and successful share-trading certainly isn\u2019t the same as completing levels on Candy Crush. It involves a decent amount of research, strategy and a basic set of basic principles to stick to. Some do enjoy but trading isn’t a game.<\/p>\n I often get asked by clients, friends and family to take a peek at their self-managed share portfolios they hold on platforms. Without wishing to sound too harsh, I generally find these aren’t really up to much (sorry Mum!).<\/p>\n In virtually every case, they\u2019d have been better-off investing in a well-diversified tracker or managed fund rather than following tips from their platform\u2019s unaccountable investment \u201cexperts\u201d or best-buy lists.<\/p>\n Like crypto, if you’re going to manage your own investment portfolio, approach it with a plan, don’t blindly follow tips, diversify in the right way and review it on a regular basis.<\/p>\n Invest or speculate?<\/strong><\/p>\n Speculating on crypto or individual shares is no biggie if you fancy a flutter with small money you can afford to lose. Just be sure to form a view based on some balanced research and be very wary of gambling with pots of money you\u2019ll probably need to live off in the future (like pensions and ISAs).<\/p>\n Real investing is more structured and involves the balancing of different risks in order to generate more reliable and predictable returns over the long-term.<\/p>\n If you want to make this all a lot easier for yourself, get in touch with us today and we’ll show you how we can help you plan, invest and live better.<\/p>\n Simon Ben-Nathan<\/em><\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" \u201cIf you\u2019re seeing bitcoin on a bus, it\u2019s time to buy.\u201d You might\u2019ve seen this advert doing the rounds on public transport. This probably won\u2019t come as a surprise to you but as someone whose job it is to help people invest for their futures, this ad sends a shiver down my spine. Cryptocurrency … Continue reading “Investing – it’s all just fun and games”<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1327"}],"collection":[{"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=1327"}],"version-history":[{"count":18,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1327\/revisions"}],"predecessor-version":[{"id":1589,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/posts\/1327\/revisions\/1589"}],"wp:attachment":[{"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=1327"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=1327"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.arkenstonewealth.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=1327"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}