As gold and Bitcoin become easier than ever to own, more people are asking whether they belong in a portfolio. The answer depends on your goals, time horizon, and what you are trying to diversify against.
Read the full transcript
AJ, not a week goes by without a client asking me, “Should I own gold or Bitcoin or neither or both?” What is your take on this right now?
That’s a great question. Especially gold and Bitcoin too now, these are almost like emotional assets. So, I think you kind of have to figure out, why is this client asking me about gold or Bitcoin? Should I own it? Should I not own it?
And historically speaking, I think people have looked at gold as sort of an inflation hedge or a recession hedge, even a government hedge. And Bitcoin, sometimes it could be viewed that way, but it’s almost like the inverse. It could be viewed as like a leveraged investment into risk or into the stock market.
But you’re seeing people combine these assets into one portfolio. So, I think, in the case of a client, when they ask that question, it does come down to individual circumstances. Your investment time horizon. What are you actually trying to diversify away from? And then second to that is, okay, if I’m going to own these, one or the other or both, how much do I allocate here?
But I think the good news is these assets are a lot easier to own than they were maybe 10 years ago, 15 years ago, or 20 years ago. In the case of gold, you were carrying around a gold bar and locking it in a safe somewhere. With bitcoin, you had to mine it, or you had to go buy it on some obscure exchange. Today, you can just own an ETF. So, super liquid, easy to own. It just comes down to, does this fit in your portfolio?
So, it’s a lot easier to incorporate these assets into our plans now than ever before?
For sure.