In the past, those who were looking for the potential of growth on their investments of a significant amount in a short period of time were usually relegated to buying stocks. The fortunes of companies issuing stock always have the potential to rise in a hurry, and, even if it’s not astronomical, it’s still at a higher rate than safer instruments like bonds. But stocks have received competition in that arena recently from the digital coins known as Bitcoin. In just a short period of time, the coins rose tremendously in value and made early investors extremely wealthy in the process. It is now starting to morph into a situation where many investors are choosing between the two assets to fill out their portfolio.
There are pros and cons to both assets, and there is an argument to be made that the best portfolios will have some of both stocks and Bitcoin included. For those who might be wary of how to get involved with Bitcoin, a trading program in the manner of Bitcoin Code can solve a lot of problems. Whenever you are deciding on an investment which will take some of your money, you should prepare by doing a comparison of how the asset in question stacks up against others of its ilk. Here is a side by side look at Bitcoin and stocks.
Stocks have an edge on Bitcoin in that they are generally less volatile, as Bitcoin, especially in recent months, has been prone to wild price swings that have even the heartiest investors feeling a little queasy. In addition, certain companies that issue stock also pay periodic dividends to investors, which can act as a kind of bonus. The downside to stocks is that the most dependable ones are quite pricey, and there are so many that it can be difficult to figure out which of the cheaper stocks actually have any potential.
Bitcoin is an exciting investment because even as is has already risen in value a tremendous amount, it has the capability of going much higher still. That’s because many of its adherents think it will eventually replace the financial system of banks and traditional financial entities. If that is the case, it can still be a financial windfall even for people who are just getting in it now. On the downside, there is a possibility that regulations might make it difficult for Bitcoin to continue to grow or even exist.
- The Argument for Having Both
Diversification is one of the oldest tricks in the investment book, and it certainly holds true in this case. If Bitcoin soars, it will help you balance out any losses taken by stocks in the upheaval if you have it in your portfolio. If it craters or ceases to be, your exposure to stocks will help you mitigate the losses.
No matter whether you choose Bitcoin, stocks, or both, your best bet is to do as much research as possible before proceeding. If you can commit to that, your portfolio should be stable regardless of your selections.