You may have an easier time checking out a stock than a given digital coin.
- Cryptocurrency is a relatively new investment, and a speculative one at that.
- You can take solace in the fact that some stocks have been around for over 100 years.
- You may also find it easier to value companies than to value digital coins.
More than 84 million people own cryptocurrency, per US News and World Report. So if you’ve been feeling pressured to add crypto to your investment portfolio, that’s understandable. And if you’re afraid to do it, well, that’s understandable too.
While stocks are a risky enough asset on their own, crypto tends to be much more volatile. So, the value of your portfolio can change even more wildly if you add crypto to your personal investment mix.
But volatility isn’t the only reason to choose stocks over crypto. Rather, you can take solace in the fact that stocks can be much easier to research and that they have been around much longer.
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A relatively new investment
At this point, crypto has become so mainstream that it’s easy to forget how new it is. But in fact, Bitcoin, the first form of crypto, was first released in early 2009. This means that if a crypto were a US citizen, they wouldn’t even be old enough to vote.
On the other hand, many of the companies whose shares are traded today have been around for more than 100 years. Take Procter & Gamble, for example; it was founded way back in 1837. Similarly, Johnson & Johnson was founded in 1886.
Now obviously there are many newer companies that you choose to invest your money in as well. The thing is, though, the oldest cryptocurrency is only a teenager, so it’s hard to know how much staying power the digital currency has. But it’s fairly fair to say that many of the companies that are publicly traded today are not on the brink of extinction based on the fact that they have already proven their ability to continue.
A question of value
When buying stocks to add to your brokerage account, it’s important to make sure they’re a solid bet. What you generally want to look for are stocks that offer a lot of value or good value for their share price. Likewise, you’ll want your stocks to have the potential to gain a lot of value over time. And there are various metrics you can use to see if a stock is a good choice.
On the one hand, you can look at revenue. Publicly traded companies must disclose their earnings so investors can see what they’re getting into. You can also look at a company’s cash flow and debt to get an idea of how well it’s doing.
There are other metrics you can look at to see if a stock is worth the price it’s trading at, including earnings per share. With cryptocurrency, it is difficult to determine if a currency is trading at a fair price and if it is worth the price. This is because digital coins are not a business – they are an asset whose value largely depends on what investors are willing to pay at that moment.
Go with your gut
Some people have had great success with crypto. But if you think it’s too risky, you really don’t need to put your money into it. There are plenty of other assets you can load up on that can help you achieve your financial goals, so there’s no point in taking a risk with a newer, more speculative asset that you just don’t like.
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