Enhance Your Retirement Portfolio: The Benefits Of Adding Cryptocurrency
Benzinga
By Kyle Anthony, Benzinga The term ‘investment opportunity set’ is defined as the universe of investable assets available to investors from which they can construct a portfolio. For most investors, these investable assets include stocks, bonds, real estate and even precious metals, such as gold. However, for many investors, digital assets such as cryptocurrencies are not top-of-mind as investable assets due to their public perception or the limited knowledge individuals may have of the asset class. However, cryptocurrencies present an opportunity for investors, such as retirement savers, to bolster their portfolio with an asset class that has compelling diversification qualities and strong return generation capabilities. Why Retirement Savers Should Consider Cryptocurrencies A primary rationale for adding crypto to retirement savings is the diversification benefit of an asset class largely uncorrelated to traditional assets. Across the investment landscape, performance leadership and the degree to which one asset class outperforms the other changes every year. But instead of trying to guess and gauge which asset class will be the best, diversification encourages broad exposure to all of them. By taking a multi-asset approach to investing, retirement savers can spread risk and enhance potential returns by including a mix of different asset types in a portfolio. Thus, a small allocation to cryptocurrency in a diversified portfolio may be able to increase expected returns without materially increasing overall portfolio risk. During bull runs, the rapid appreciation of crypto assets can boost the value of a retirement fund, providing a high-reward opportunity for investors. However, it is essential to manage these investments responsibly, considering the inherent risks and employing a balanced approach to ensure long-term financial security. How Much Should One Allocate To Their Portfolio? Every individual’s personal investment situation is different; as such, how much of a particular asset class they are exposed to will vary depending on their circumstances, such as age, experience, income level and risk tolerance. Because crypto is a high-risk/high-return-potential asset class with a low correlation to stocks, crypto assets can potentially help investors overcome some of the portfolio construction challenges they face today. A moderate allocation can have a material impact on their portfolio’s performance. With allocation comes periodic rebalancing. Crypto allocation must be routinely tweaked to align with investment goals. Choosing Which Cryptocurrency Is Suitable For One’s Portfolio The cryptocurrency investment landscape is broad, so the investment options that investors can choose from are diverse. For retirement savers, cryptocurrencies such as Bitcoin and Ethereum would be a natural fit due to the existence of an established investor base and market. However, their established nature doesn’t preclude them from being susceptible to swings in market price. While there are less established cryptocurrencies, it is incumbent upon investors to understand their value proposition and the protocols underpinning them before they invest. How Can One Add Cryptocurrencies To Their Portfolios? The unitization of Bitcoin and Ethereum in the form of exchange-traded funds (ETFs) has made adding cryptocurrencies to one’s portfolio relatively easy in recent years. However, for investors who desire to have direct ownership of their cryptocurrency, Caleb & Brown, the crypto investor’s expert partner, provides personalized service for beginner and advanced investors alike, with Bitcoin and hundreds of other crypto assets readily available for one’s portfolio. With 24/7 access to a personal relationship manager, investors can buy crypto with fiat currency and no deposit fees. Since Caleb & Brown doesn’t need to deal with network latency issues which sometimes plague exchanges, clients will have access to a pool of interchangeable assets. This not only makes crypto acquisition easier, but it also makes other difficult-to-access tokens easier to acquire. With over 20,000 crypto assets in existence, each with its own uses and applications, Caleb & Brown can provide resources and insights on the cryptocurrency landscape that can aid their clients in their decision-making and give them the confidence needed to navigate the world of crypto. Click here to learn more. Featured photo by Daniel Dan on Unsplash. Benzinga is a leading financial media and data provider, known for delivering accurate, timely, and actionable financial information to empower investors and traders. This post contains sponsored content. This content is for informational purposes only and is not intended to be investing advice Contact Details Benzinga +1 877-440-9464 info@benzinga.com Company Website http://www.benzinga.com
June 26, 2024 08:50 AM Eastern Daylight Time
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