Don’t Get Bit By Bitcoin!

The other day, someone asked me what I thought about investing in bitcoin or other cryptocurrencies.  The person who asked is someone that has never invested in a mutual fund or stock, and now they’re asking me about bitcoin!

STOP!!!

I am a big believer that some cryptocurrencies are here to stay.  However, at the present time, I will say this to you with certainty: Don’t invest in bitcoin unless you are willing to lose 100 percent of your money.

Bitcoin has captured the fancy of Joes and Janes all over the world.  It has had a meteoric move, its value going from around 10 cents to as high as $17,000.  However, in my view, it is more gambling than investing.

For one thing, with bitcoin, the easy money has already been made.  Those who got into it 2 or 3 years ago have made a fortune.

Also, we have no idea what the price of bitcoin is going to be in a year, 2 years, or 5 years.  It could be $100,000, $1 million, or 1 penny.  Part of bitcoin’s appeal is the fact that it is not controlled by any central bank; it is a transaction between 2 people, and you don’t even know who is on the other side of the transaction.  It is not protected or backed by any government, and its value is based merely on what people are willing to pay for it.

Listen – bitcoin is currently a “mania”.   And like all other manias in the past, it will crash.  People gravitate to get-rich-quick schemes all the time – this is no different.

Remember the dot-com boom?  In 1999, every Tom, Dick and Harriet invested in any company with a “dot-com” at the end of it: companies like Pets.com, Toys.com, and others that are long gone today.

In contrast, the value of a stock is based on the profits and growth of a real business.  It is therefore possible to make projections with some degree of confidence.

Instead of allowing yourself to get bit by bitcoin, set your sights toward real investing.  Learn how to get started in my e-book and at The Motley Fool.  Share your experiences, thoughts and questions in the comments!

Until next time…

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click here to be taken to its Amazon page.

(Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)

 

 

 

When “boring” is SEXY!

I’m not embarrassed to admit that I look at my phone CONSTANTLY.

Not for text messages, Facebook notifications, celebrity gossip, or cat videos.  No, the reason you’ll see me checking my phone frequently is to look at STOCK QUOTES.  I’m not afraid to share with you that I’m addicted to watching the markets!

Remember, though…as your mother (or grandmother) said about a watched pot: it never boils!  The same concept applies to stocks.  I can stare at the performance of a stock all day, but in the grand scheme of things, it’s not doing all that much at any given time.

One of the toughest things about investing is, simply put, it’s pretty boring.  Correction: very boring!

Now, this is what many people struggle with.  They want to see phenomenal returns tomorrow – or at the latest, next week.  However…the market doesn’t work like that!  It’s a slow, daily grind – month after month, year after year, decade after decade.  Until one day…your modest portfolio ain’t so modest anymore!

Ladies and gentlemen…now THAT’S sexy!

As always, if you’d like a quick, basic and easy-to-understand introduction to investing in the stock market, please check out my e-book, The Stock Market is for Everyone.

Until next time!

 

My book, The Stock Market is For Everyone, is a short guide for the beginning, inexperienced investor that is easy to understand and can be put into action immediately.

Click here to be taken to its Amazon page.

(Disclosure: As a participant in the Amazon Services LLC Associates Program, I earn a small commission on each sale generated through these links.)