Should Cryptocurrencies be part of your Investment Portfolio

Financial Expert Suze Orman Discusses Whether or Not Cryptocurrency Should Be Part of Your Investment Portfolio

In April, Suze Orman stated that on her show, which is on CNBC and based on pre-recorded episodes, Bitcoin (Bitcoin) is a bad investment. It’s too volatile, and she doesn’t recommend anyone invest in it. But what if I told you that she actually endorses Bitcoin – just with a couple of conditions?

“It’s fine to invest in a risky asset if you can afford the loss and you are going to stick it out for a long time.” She said. The personal finance icon also revealed that she had invested $5,000 in Bitcoin as of April. Orman has an optimistic outlook despite the consistent crypto market volatility and other unknowns about potential future regulation and cybersecurity concerns. Yet, even with all her remarks, she’s still a bitcoin fan.

Tips for Investing in Bitcoin, or Other Forms of Cryptos

Stick with the most popular cryptocurrencies like Bitcoin and Ethereum. More, if you decide to invest in bitcoin or other cryptocurrencies, make sure you know what you’re doing. Don’t let emotions or fear guide your investment decisions. The cryptocurrency market is volatile and risky — and those risks can increase dramatically if you don’t know what you’re doing or don’t have the time to research before making an investment decision.

If you’re planning to invest in Bitcoin or other cryptocurrencies, you should consider crypto a high-risk asset class within your portfolio. The value of Bitcoin and any crypto can fluctuate wildly by the day, so you should be comfortable with the volatility and uncertainty that comes with it. Many experts say you should keep your total exposure to no more than 5% of your portfolio — and even then, only if you’re willing to accept that you could lose some or all of those investments.

One of the most important questions for investors when deciding how much of their investment portfolio should be comprised of crypto assets is: “What are the risks involved?” For many people including Suze Orman, the answer to that question will come down to how much money they are willing to lose.

How Does Bitcoin Compare to Index Funds?

Bitcoin is an entirely new asset class, and as such, it needs to be treated like any other investment. One of the first things every investor needs to do before investing in a stock or cryptocurrency is to determine how it compares to similar investments. Since Bitcoin is a relatively new asset class, there aren’t many mutual funds or index funds that invest directly in Bitcoin. There are plenty of index funds that include companies with exposure to Bitcoin or other cryptocurrencies. Many investors choose to use these kinds of investments as their primary diversification tools instead of using them as an alternative when they cannot put money into something like Bitcoin directly.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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