blog/pod

Somewhere out there a group of friends is texting “Rocketship” emojis and hopeful affirmations that Dogecoin will “go to the moon.”

Somewhere out there a tech guru who bought into Bitcoin before it was mainstream is asking themselves, “Is it time to get off the roller coaster before it’s too late, or should I try to ride the wave a little longer?”

Somewhere out there an ordinary investor is getting antsy from brushing off the hype and sitting on the sidelines while their friends on social media brag about the returns they have been experiencing.

And everywhere out there, media outlets, asset managers, and neighbors are sharing their opinion on Cryptocurrency (and other “Meme” investments).  So why not throw my own perspective into the ring?!  But before I do, let me start with some facts about the topic (from our friends at Vanguard):

• Cryptocurrencies are digital and decentralized means of exchange.
• Cryptocurrencies are not backed by any government or central bank, but instead operate on a peer to peer exchange and are stored in the holder’s “digital wallet.”
• The Blockchain technology underlying cryptocurrencies is being increasingly adopted by several industries as an efficient and transparent way of recording transactions.
• Unlike stocks and bonds, cryptocurrencies lack intrinsic economic value and generate no cash flows, such as interest payments or dividends.
• These investments come with significant potential risks including volatility, liquidity, regulatory, cybersecurity, and many others.
• There are more than 6,700 cryptocurrencies including Bitcoin, Ethereum, and Litecoin.

When our clients ask us to speculate on Bitcoin and other investing phenomena, we won’t even try…because we’d be just guessing as much as everyone else.  We know that outsized returns come with outsized risks.  We just don’t know which end of the tail you’ll experience with your investment.

However, if trading or holding Crypto has been on your mind, it’s certainly an important conversation that we should have.  We can revisit your most important goals, opportunities, and concerns that were discussed in your Personal Mission Builder meeting and outlined in your Vision Link Report.  We’ll then ask you to ponder some additional questions:

1. What life goals, unique needs, and top priorities within our plan have changed to warrant this speculative investment?
2. What amount of your assets are you willing to risk without any emotional consequence?
3. If this money wasn’t invested in Crypto, what would you hope to use this money for in your life?  
4. How will your life change if this investment produces the upside you believe it’s capable of?
5. How will your life change if this investment goes to 0?  

If you can confidently answer these questions with a clear head and keen self-awareness, then we most likely won’t try to talk you out of using a small play portion of your portfolio to roll the dice with stuff.

We’ll give you the green light to invest the appropriate amount, and we’ll be there to cheer you on and hope that it “goes to the moon” for your sake.  I’ll even email you a Rocketship emoji if you’d like!

But as your financial planner, we’ll also do everything we can to ensure all of the hysteria and pandemonium isn’t distracting you from the things that matter in your life.  Our first priority is to ensure your life determines your investment strategy rather than your investment strategy determining your life.  We continue to bring you clarity and accountability, so we can stand in between you and the big mistake.  We won’t let the Crypto-hype be your financial Kryptonite.

Reach out if this topic is on your mind…because you’re certainly not alone if it is.