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Saving Used to Be Enough #
Everything used to be better, and much easier. If you had extra money, you’d park it in your savings account or buy some government bonds. A no-brainer. The interest wasn’t high, but always enough to beat inflation.
That’s ancient history. In recent years, inflation has risen sharply while interest rates have fallen. Anyone parking money in savings accounts now loses purchasing power every month.
The constant manipulation of money and capital markets has thrown off the traditional investor’s toolkit. The compass that was supposed to point north is no longer reliable.
When the Compass No Longer Works #
If you’re on a ship and can no longer trust your compass, you have a serious problem. The chances are high you’ll slowly drift off course.
Then it’s time to ask yourself how to get your ship sailing toward harbor again, and how to make the equipment work for you again.
It’s high time for investors to reassess and redefine their traditional portfolio and risk diversification model. One thing seems certain: the role for loss-making bonds appears largely played out.
But where do you put your money then? Perhaps in the ‘super-risky’ Bitcoin after all?
The Smart Allocation #
Asset managers like BlackRock now advise their clients to invest 2 to 5 percent of their wealth in Bitcoin.
That’s smart, because the chance of Bitcoin losing its luster is small. In that case, you’ve lost at most 2 to 5 percent of your wealth.
But according to experts, the chance is much greater that the Bitcoin price will be significantly higher in the coming years. In that case, you benefit nicely. It’s a matter of probability calculation.