BTC in the portfolio – reducing risk, increasing profitability
3 min readIf you are wondering how to properly divide the portfolio for the coming years, then this article is dedicated to you! Such a question is asked by many investors and has even been the subject of research by the prestigious Yale University. So is it worth buying BTC?
RETURN ON DIFFERENT TIME INTERVALS
According to the chart of the World Bank JP Morgan, which summarizes the performance of various financial instruments over the last 20 years, gold is at the top of the return on investment. Gold has been more efficient over the last 20 years than stocks, oil, portfolio mix, bonds or real estate.
But the summary over the last 20 years is not entirely objective!
- Return over the last 40 years: the S&P 500 has a yield of 11.67% per year and a total return of 8,200%, with gold having an annual yield of 4.30% and a return of 439%.
- Looking at the appreciation over the last 80 years: the S&P 500 had an annual appreciation of 11.19%, a total return on investment of 488,388% and a gold return of 4.62% and a total return of 3,621%.
So with a longer holding of major US stocks, ie. S&P 500 index, we can have several times higher appreciation and return on investment than it can be with the aforementioned gold.
However, these are only historical data.
HOW DO WE SOLVE OUR PORTFOLIOS IN THE NEXT 10-20 YEARS?
- Stock experts state that in the next decade we can consider -3% to + 1% appreciation in stocks.
- For a 10-year bond at average yields, the appreciation could range between 2.5% and 3.25%.
- If you want to keep the US dollar, then we are talking about the annual 2% effect of inflation on your money. This means that you lose 2% of your money deposited in the bank every year.
If investors decide to invest in traditional assets, they cannot expect too much appreciation.
The inclusion of BTC in its portfolio will lead to better financial value and can also reduce risk. Similarly, it has been the last 10 years for stocks that have experienced the largest bull market – the largest growth – in their history.
According to research from Yale University, everyone should have at least 6 to 10 percent of their portfolio stored in digital gold. That means in Bitcoin.
According to the prominent economist Aleh Tsyvinski from Yale University, therefore, every investor should have an optimally balanced portfolio, to which BTC should also belong. According to the research results, we conclude that BTC shows a much higher return on investment and appreciation than any other financial instrument in the long-term holding perspective.
BTC: A DREAM FOR LONG-TERM INVESTORS
To date, BTC’s market capitalization is about $ 850 billion. If investors invest in the long run, then they expect volatility while holding the currency or other investment assets.
We hear a lot of opinions on BTC from all sides. Every investor should do their own little research – for example, what type of technology BTC is about and what added value it brings to the world. Let him be fully acquainted with a long-term investment and not just pursue multiple profits.
In this case, it’s BTC dream for long-term investors who are looking for a very satisfactory return on investment in 5 to 10 years.
See also: What is BTC?
