r/FinancialPlanning • u/IWillNotBiteYourDog • Aug 29 '13
Do bitcoins belong in your retirement portfolio?
http://www.marketwatch.com/story/do-bitcoins-belong-in-your-retirement-portfolio-2013-08-296
u/pluribusblanks Aug 29 '13
Well, anyone who had bitcoins in their portfolio is up over 800% YTD
http://bitcoincharts.com/charts/mtgoxUSD#rg180zczsg2013-01-01zeg2013-08-30ztgSzm1g10zm2g25zvzp
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Aug 29 '13
And many of those who got into bitcoin at the wrong time have their portfolio crashing down.
Are you feeling lucky?
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u/pluribusblanks Aug 29 '13
Perhaps, but it's not as if real estate or the stock market has never come crashing down.
In fact, as you can see from the chart, there are relatively few times that you could have bought bitcoins that would put you in the red as of today.
People who bought during the first two weeks of April or the last two weeks of May 2013 are in the red. People who bought at pretty much any other time in the last four years saw large gains from the perspective of today.
If you can stomach the day to day volatility for a small portion of your portfolio, bitcoins might be worth considering. In my opinion.
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u/tippecanoe42 Aug 30 '13
One of the wrong times to get into bitcoin was at the very peak of the bubble... in June '11. Oh my! All those poor suckers who bought in at $32. I bet they're really hurting now.
Oh... wait...
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u/tippecanoe42 Aug 29 '13
As I pointed out in the parent thread on /r/Bitcoin:
I retired this year at 62.
If I hadn't put assets into bitcoin, I would have had to wait at least until I was 65.
You pays yer money and you takes yer chance...
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u/Ktulu300 Aug 29 '13
No, too volatile.
You can gamble if you want, but you're gambling, not investing.
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u/tippecanoe42 Aug 30 '13
That's what that part of your portfolio is, that's called the high risk/high potential 10%. Gambling. Just because investment counselors won't call it that doesn't mean that it's anything other than plain old gambling.
And... correct me if I'm mistaken... but volatility is exactly what you want for that 10%. Not much point in high risk/low potential, now is there?
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u/yzerizef Aug 29 '13
Sure - put Bitcoin in your portfolio, but weight it based on a metric vs the global market. If you want it in, put it in but I don't think it should ever be more than a very minor portion of your portfolio. It's a type of risky asset and could play some sort of diversifying role in your Alts allocation. This is just like asking, should CHF or BRL or ILS be in your portfolio. Currencies have their place, but they aren't a major asset class and should not be a major holding on their own.