The term 'investment opportunity set' refers to the range of investable assets available to investors for portfolio construction. Traditionally, these assets include stocks, bonds, real estate, and precious metals like gold. However, digital assets such as cryptocurrencies often remain overlooked due to public perception and limited knowledge about this asset class.
Cryptocurrencies present a compelling opportunity for retirement savers to diversify their portfolios with assets that offer significant diversification benefits and strong return potential. One primary reason to consider adding cryptocurrencies to retirement savings is their low correlation to traditional assets. Diversification encourages broad exposure across different asset classes, helping to spread risk and enhance potential returns. A small allocation to cryptocurrency can potentially increase expected returns without significantly increasing overall portfolio risk.
During market bull runs, the rapid appreciation of crypto assets can boost the value of a retirement fund, offering high-reward opportunities for investors. However, responsible management is crucial, considering the inherent risks and employing a balanced approach to ensure long-term financial security.
The amount of cryptocurrency to allocate in a portfolio varies based on individual circumstances such as age, experience, income level, and risk tolerance. Given its high-risk/high-return potential, cryptocurrency can help investors overcome some portfolio construction challenges. Regular rebalancing is essential to align crypto allocations with investment goals.
The cryptocurrency investment landscape is broad, offering diverse options for investors. For retirement savers, established cryptocurrencies like Bitcoin and Ethereum are natural fits due to their existing investor base and market. However, even these established assets are not immune to market price swings. Investors must understand the value proposition and protocols of any cryptocurrency before investing.
Adding cryptocurrencies to a portfolio has become more accessible with the advent of Bitcoin and Ethereum exchange-traded funds (ETFs). For those seeking direct ownership of cryptocurrency, Caleb & Brown offers personalized services for both beginner and advanced investors, providing access to Bitcoin and hundreds of other crypto assets. With 24/7 access to a personal relationship manager, investors can purchase crypto with fiat currency without deposit fees. Caleb & Brown's streamlined process ensures access to a pool of interchangeable assets, facilitating easier acquisition of difficult-to-access tokens.
With over 20,000 crypto assets available, each with unique uses and applications, Caleb & Brown provides valuable resources and insights to help clients make informed decisions and confidently navigate the cryptocurrency landscape. For more information, click here.
Featured photo by Daniel Dan on Unsplash.
