New Yale University Study — every investor should have 6% of their portfolio in Bitcoin
Source: https://bitcoinist.com/new-yale-study-every-portfolio-must-include-at-least-6-bitcoin/
A Yale economic professor has come forward in a new study and said that all investors who beleive in a balanced portfolio should have 6% of their portfolio in Bitcoin.
He studied only Bitcoin, Ethereum and Ripple in his study.
If you are really risk averse, than maybe 4% of your portfolio would be recommended.
What are the reasons for such a recommendation?
As with Stocks vs Bonds vs procious metals, cryptos add “diversification” from stocks.
Precious metals like gold and silver tend to go up when the stock market crashes.
Bonds offer an interest rate returns and are less volatile than stocks (usually).
Cyrpto’s ? As a currency or utility coin are they different than stocks ...yes.
In the history of Bitcoin, has it offered a nice % return over 5 yrs? Yes
Below is a Correlation Chart for Cryptos vs Stocks, Bonds etc....
Look at Cryptos compared to the S&P 500 index ... the chart shows a 13% correlation...which is low. When an investor buys Google, Netflix, Amazon and Apple stock that is practically 100% correlation — they are all high tech stcoks so if the stock market went down there would be a near 100% correlation that all this stocks would go down. Cryptos would be LESS correlated.
Is this good news for crypto’s? I would say over the next few years you will see this concept put in practice across investment advisors as they will have more access to many more crypto investment vehicles and regualtions will be in place fro IRA’s / 401k’s etc...
Of course, we all here of other Professors who say bitcoin is a failed experiment, so everyone has an opinion. This is what makes a market.
I agree, not only Bitcoin however. They should keep 3% maybe in there, and the rest in others like #bitshares :)
I agree that good diversification beyond bitcoin will be wise and rewarded. Time will tell.
Maybe better like 3% bitcoin, 3% altcoins, especially for smaller portfolio, need more aggressive strategy
I am surprised it’s only 6% to be honest... :-)
Hey!! Thanks for the information! Reesteem. Greetings
You are welcome..thanks for the comments.
More vehicles to invest can only be good.
They are saying to people to maybe invest 6% of savings....it’s up to each what they can afford or want to do.
Thank you for your nice update!!
Very promising for the long term.
Cheers.
Patience will be rewarded :-)
@floridanow more articles will be?
I belive articles will be more and more positive.