{"id":14863,"date":"2020-03-23T20:37:48","date_gmt":"2020-03-23T20:37:48","guid":{"rendered":"http:\/\/mediashower.com\/blog\/?p=14863"},"modified":"2020-03-23T20:37:48","modified_gmt":"2020-03-23T20:37:48","slug":"did-blockchain-believers-beat-the-stock-market","status":"publish","type":"post","link":"https:\/\/www.mediashower.com\/blog\/did-blockchain-believers-beat-the-stock-market\/","title":{"rendered":"Did Blockchain Believers Beat the Stock Market?"},"content":{"rendered":"

In my book Blockchain For Everyone<\/a> (now a bestseller<\/a>), I outlined a simple method for investing in digital assets without breaking the bank. If you\u2019re still watching from the sidelines, the new year is a great time to get invested — and to review the results of our investing strategy so far.<\/p>\n

The basic idea is to \u201cseed\u201d your account with a one-time investment (for illustrative purposes I chose $10,000), then sock away a set amount on the 1st<\/sup> of every month (I chose $100). You can use any starting amount, and any monthly amount — the important thing is to be consistent. (Details here<\/a>.)<\/p>\n

In a plain-vanilla portfolio, you might invest these monthly installments in traditional stocks and bonds, like so:<\/p>\n


\n\"Non<\/center><\/p>\n

But let\u2019s say you\u2019re a smart investor who\u2019s heard of the incredible profits made by bitcoin billionaires. You want to buy a little bit of bitcoin, without betting the bank. In the \u201cBaby Believers Portfolio,\u201d you put 2.5% of your monthly contribution into bitcoin:<\/p>\n

<\/p>\n

\"Baby<\/center><\/p>\n

And if you believe even more strongly in this new class of digital assets, you can invest up to 10% in the top 3 altcoins (5% bitcoin, 2.5% Ethereum, 2.5% Ripple):\u00a0<\/p>\n


\n\"Big
\n<\/center><\/p>\n

The Honest Results<\/h2>\n

Anyone can make a \u201cwinning portfolio\u201d by looking at past performance, just like anyone can pick \u201cwinning lottery numbers\u201d by looking at what was picked last night. The trick is to come up with a winning portfolio for the future.<\/em><\/p>\n

This requires honesty. In the book, of course, I looked at past performance to come up with my winning portfolio — I had to show that this approach was both sensible and\u00a0<\/em>profitable. But would it hold into the future?<\/p>\n

After I finished the manuscript in August 2018, I began tracking the performance of the Baby Believers and the Big Believers, judged against the Non Believers. And here\u2019s where we are today: the Non Believers and the Big Believers are just about even, while the Baby Believers are edging them both out.<\/p>\n


\n\"The<\/center>Here are the three portfolios, by percentage gains:<\/p>\n


\n\"The<\/center>To explain these results, let\u2019s look at the fortunes of each of the \u201cingredients\u201d in the \u201cpie.\u201d While both the stock market is up 10%, Ethereum and Ripple have lost around half their value:<\/p>\n


\n\"Percentage<\/center>The extreme volatility of these digital assets is why we invest only a small amount. By limiting our exposure to Ethereum and Ripple, we are still on par with the Non Believers who invested only in stocks and bonds. And those who invested in bitcoin (the Baby Believers) performed best.<\/p>\n

Of course, all this is a lot of work for not a lot of return. Buying these digital assets, taking the additional risk, reinvesting the profits\u2014and this is the thanks we get?<\/p>\n

It comes down to what you believe. If you think digital assets are the future of finance, you\u2019re still keeping up with the stock market, and you\u2019re poised to take advantage of future gains.<\/p>\n

If you\u2019re not a believer, then I urge you to consider what you do\u00a0<\/em>believe. Do you think that the entire digital asset market — all $200 billion of it — will go to zero? That it will all turn out to be a weird dream, and the global economy will just return to exactly where it was before bitcoin? If not, then what?<\/p>\n

If you believe — as I do — that change is inevitable, particularly in money matters, then you can keep investing. (Or start investing.) You can invest — as I do — primarily in the traditional markets, with a small \u201cside bet\u201d on the new digital markets.<\/p>\n

Rebalance Portfolios on January 1 and July 4<\/h2>\n

These returns assume that you are rebalancing your portfolio every month. For many people, this is impractical, so consider rebalancing at least twice a year (January 1 and July 4 are easy dates to remember — at least for our American readers).<\/p>\n

For a Baby Believer, this means if you are holding more than 2.5% of your portfolio in bitcoin (which you are), sell the bitcoin and reinvest it in the other slices of the pie.<\/p>\n

This is the hardest thing to do, since we naturally want to hold onto a winning hand. But it must be done. If you\u2019re following the Baby Believer or Big Believer strategies, please consider reallocating your entire portfolio so you\u2019re back in line with the percentages — and believe in them.<\/p>\n

Bottom line: If you\u2019re making New Year\u2019s Resolutions or planning your financial strategy for 2020, here\u2019s an investing blueprint to get you started. And once you\u2019re started, don\u2019t stop believing.<\/p>\n

Sign up here<\/em><\/a>\u00a0to get more blockchain intelligence and insight in our free weekly newsletter.<\/em><\/p>\n

<\/p>\n

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<\/p>\n","protected":false},"excerpt":{"rendered":"

In my book Blockchain For Everyone (now a bestseller), I outlined a simple method for investing in digital assets without breaking the bank. If you\u2019re still watching from the sidelines, the new year is a great time to get invested — and to review the results of our investing strategy so far. The basic idea… Read More…<\/a><\/span><\/p>\n","protected":false},"author":2,"featured_media":14864,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[459],"tags":[],"_links":{"self":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts\/14863"}],"collection":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/comments?post=14863"}],"version-history":[{"count":3,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts\/14863\/revisions"}],"predecessor-version":[{"id":14867,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/posts\/14863\/revisions\/14867"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/media\/14864"}],"wp:attachment":[{"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/media?parent=14863"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/categories?post=14863"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.mediashower.com\/blog\/wp-json\/wp\/v2\/tags?post=14863"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}