Investment Insights
Investments do rise and do fall in value and we strongly advise that professional advice is taken before investing your money
Every time the hot new trend comes along, it can be all too easy to get swept along in the wave of hysteria and Bitcoin is one such example. I am often asked questions such as ‘so Steve, this looks great, should I fill my boots?' 'Look at the returns, I could be making, it's a sure thing, right?!' Now let me try to answer the question... Fiat currencies are debased by the continued printing of money by their respective governments and this strategy is a mechanism of managing an economy and therefore the more money in circulation the more in demand assets become as more money is chasing the same assets (supply vs demand). If you have a fixed supply of an asset (i.e. land - they are not making any more) the price should potentially rise, and fall based on supply and demand and this is the attraction of a currency/asset such as Bitcoin relative to your local currency (£$¥), as you could buy into an asset such as Bitcoin or any other currency and sell (buy back your currency (£$¥) in order to make a profit. Whilst such a strategy may bring some success or loss, I would caution that Trading is speculation and can give you a thrill but is a risky business. Investing on the other hand is less exciting but is about growing your wealth steadily over time. The academic argument that some are making is that an asset such as Bitcoin could be a store of value in the future which can’t be debased by governments, maybe over time it could become a viable asset but at the moment it feels like the Wild West, so as always, understand what you buy and how it fits within your overall investment strategy. Remember, if you don’t understand it don’t own it! |
AuthorSteven is a Fellow of the Personal Finance Society, whom is passionate about investing and getting the most from your money. Archives
February 2024
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Steven Mufti & Associates Ltd is authorised and regulated by the Financial Conduct Authority.
Financial Services Register Number 607613. Registered in England & Wales, Company number 8664240. Registered Office address: 27 Armitage Court, Ascot, Berkshire, SL5 9TA. Telephone: 01344 623811 Email: advice@smawm.co.uk The guidance and or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted to customers in the UK. The FCA does not regulate taxation advice. The value of your investments may fall as well as rise. Financial Conduct Authority register: https://register.fca.org.uk/ShPo_FirmDetailsPage?id=001b000000NMlk7AAD |
4/3/2021
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