Wisdom of investing in these currencies is cryptic
Investors could be forgiven for suffering from FOMO when it comes to cryptocurrencies. However, before you rush in blindly, take heed of some wise words from asset managers and investment advisers who suggest a cautious approach - if you invest in them, only do so with money you can afford to lose. Brandon Zietsman, CEO and head of investments of Portfoliometrix, which advises financial advisers on how to construct investment portfolios, says in a recent report that if you invest in cryptocurrencies "you can (as many have done) make a spectacular profit", but you can also do that at a casino. "It is called speculating, plain and simple." Not like equities Zietsman says when valuing cryptocurrencies, you need to know the economic return, the scarcity and the utility of the currency. He says that unlike other asset classes like equities, real estate or bonds, cryptocurrencies have no economic return. In the case of gold, an asset that does not have a yield, the metal is scarce and in ...
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