You may have heard
of the “60/40” rule for retirement accounts. In the past, conservative
brokers have traditionally recommended putting 60% of your assets in stocks and
40% in bonds.
Just take a look at
how that advice is playing out in today’s economic climate. If you are
continuing to follow the 60/40 rule, think again.
Bond yields have
seen an alarming plunge and stocks are still near all-time highs, even with
dips caused by the coronavirus panic. Volatility levels have been rising
and are showing no signs of slowing down as the world braces for an inevitable
recession. Not exactly the time to have all your money in stocks and bonds,
right?
Time for a little
secret. Let’s take a hypothetical trip back in time. It’s 2013.
There’s an asset out there that you could add to your portfolio. It’s
called cryptocurrency. You want to play it extra safe and only make it 1% of
your total investments.
Guess what? By
2020, your portfolio with a 1% crypto stake has outperformed the traditional
60/40 portfolio by 20 percent. The most exciting part? This is just the
beginning.
Last year, CNBC
reported that the United States government’s Social Security program is set to
be insolvent by 2035. If you’re in your 50’s or younger, don’t count on
much help, if any, from Uncle Sam in your golden years. Likewise, the era of
company-sponsored pensions is long gone and 401(k) matches are getting worse or
disappearing completely.
In fact, “According
to some reports, many people under 40 believe they will never retire,” says
Morgan Steckler, cryptocurrency retirement fund expert of iTrust Capital.
But for those that are smart enough to get into crypto now, “it could still lead
to life-changing returns and give those people that option to retire if they so
choose,” Steckler added.
A 2018 study by
Ramsay Solutions exposed what could be considered a crisis in this country,
revealing that roughly half of Americans are not saving for retirement.
Another study by Bankrate predicts that half of all working households will
experience a decrease in their standard of living during their retirement. Is
that really what you’ve been working towards and planning for your whole life?
All of these facts
aren’t going unnoticed. We’ve recently seen Fairfax County in Virginia
take the groundbreaking step of investing millions of its pension funds into
cryptocurrencies. Even the IRS is on board, having approved crypto IRAs
for the general public.
It’s never too late
to start planning for your retirement, and it’s still not too early to start
investing in cryptocurrency. If you haven’t seriously considered adding
crypto to your portfolio yet, now is the time. Don’t just take our word for it,
though. Let’s take a look at the top reasons why crypto should be a part
of your retirement plans.
1. Diversification
We’ve all heard the
saying, it’s as old as the concept of investing itself: “Never put all
your eggs in one basket.” Diversification helps you minimize the risk
associated with a single asset, yet still allows you to enjoy the growth of
each.
The same applies to
your retirement account. The old-fashioned strategy of only putting
stocks and bonds in your tax-deferred retirement accounts is becoming
obsolete. The IRS is fully on board with precious metals, real estate,
and cryptocurrencies as part of retirement IRAs.
Any financial
advisor worth their salt will recommend diversifying 5-10% into precious
metals, and many are now suggesting the same with cryptocurrency. And why
wouldn’t they? As an exciting new asset class that has seen consistent and
explosive growth for a decade, it’d be irresponsible not to.
2. Protection from the Government
Pick a
cryptocurrency. Bitcoin, Ethereum, Ripple, etc. It doesn’t matter
which you choose, no government can control any of them. It’s literally
impossible for Uncle Sam to seize your Bitcoins from your wallet against your
will. They’d need your private key to access your funds. If you didn’t
give it to them, then it would take the most powerful computer on earth
BILLIONS of years just to crack it.
The government can’t
print more digital currency either as they can with paper bills. Bitcoin,
for example, has a set amount of coins, period. All that will ever exist were
created with the currency itself. Outside forces are unable to manipulate
it, unlike the Dollar, Euro, Yuan, etc.
With crypto, you’re
protected from other nefarious third parties, as well. Cryptocurrencies
don’t use middlemen, so transactions are direct between two parties. This
means that it’s easier, faster, and safer overall.
3. Long-Term Growth Potential
Despite the fact
that we have already seen an enormous amount of growth in the crypto space, we
are still in its relative infancy. The other major asset classes out
there such as precious metals, real estate, stocks, and bonds have all had a
head start of hundreds or even thousands of years.
Bitcoin has now been
around for roughly 10 years, which puts it in a uniquely advantageous position.
We’re currently in the sweet spot where it has a long enough track record to
consider it an established and stable commodity, but it’s still in its relative
infancy compared to other investment options.
The subsequent
upside? There’s still tremendous growth potential. Many have been
predicting six- and seven-figure values for a single Bitcoin in a few
years. Sound crazy? It’s most of the same people that predicted the rise
from a few hundred dollars up to the $10,000 level that we’re hovering around
today (and PS, most of them are now filthy rich).
4. Crypto is Resilient
Back in 2013, the LA
Times famously published an article where they smugly declared the death of
Bitcoin. How’d that work out for them? The article has aged quite poorly,
to say the least.
Bitcoin has taken
beatings both in the media and in the markets. Detractors and naysayers
have been around since the beginning, and they have continually been proven
wrong. Nowadays, if you’re blindly slamming crypto, then prepare to be
considered out of touch.
One argument you’ll
hear against Bitcoin is the volatility of the market. Earlier this
decade, Bitcoin actually lost 70% of its value practically overnight. The
naysayers won’t tell you how it quickly bounced back and shot up past its
previous highs, though. It’s the same thing that happens every time.
Compare that to the stock, bond, or real estate markets, which can take years
just to creep back up to previous levels.
5. It’s Already Mainstream
As we just saw,
there’s still a large crowd of crypto-doubters out there. Another one of
their arguments is that Bitcoin and other altcoins are still lacking in
mainstream adoption. When you look at the evidence and trends however,
you’ll see that this point just isn’t true anymore in 2020.
Want to order
something from Overstock.com? Grab a bite from a restaurant? Purchase
sports tickets? A computer? Or a trans-Atlantic flight? Well, you’re in
luck. Some of the biggest companies and organizations in the world accept
Bitcoin as payment, including Microsoft, Dell, Tesla, the NBA, and Virgin
Galactic. People are even buying houses with crypto these days.
It’s not even a
question anymore. Bitcoin has already taken a foothold in the
mainstream. Add to this the fact that on a global scale, more people have
access to the internet than they have to banks or other currency systems.
This is especially the case in developing areas such as Africa, where hundreds
of millions of people will gain internet access for the first time in the coming
decades. Given that the supply of Bitcoin is fixed, we’re going to see a
massive increase in demand as third world nations develop.
Marcus Swanepoel,
Chief Executive of Luno, explains how “Cryptocurrency is uniquely positioned at
the apex of technology and finance. It has been lauded as a potential
game-changer for society.” Expect prices to rise accordingly.
It’s Not Too Late
The price of Bitcoin
has seen incredible growth, but it’s not too late to get in at what is still a
relatively low level. By investing in cryptocurrencies, you’re not only
protecting your portfolio from the volatility of the markets, but you’re
setting it up for significant future growth, as well. Plus, you can save
big on taxes by using cryptocurrency to contribute to your retirement IRA. It’s
the best of both worlds.
At Regal Assets, we
believe in providing you with trusted and proven cryptocurrency investment
options. We take pride in the way we do business and have enjoyed helping
our clients grow their portfolios for over a decade now. Our expert team
members work side-by-side with you every step of the way, so you can be sure
that your wealth is safe and in a position to grow.
See for yourself
what we offer with our FREE Investor’s Kit. It explains Regal’s
IRS-approved investment options and how they work. We’ll help you choose
the right strategy to achieve your goals.
Gold Safe Haven as Coronavirus Spreads, Oil Crashes
The price of gold
has been the only asset not in a total freefall of late as a result of the
coronavirus, with investors still backing its status as a safe haven and store
of value. After hitting a 7-year high of $1,700 prior to the escalation
of the pandemic last week, gold is still staying strong near the $1,600 level.
Since late 2018,
more and more investors have been flocking to the precious metal as protection
from increasing levels of economic volatility. Fears of a recession have
been steadily increasing as more and more warning signs become apparent, and
that was before the chaos that has recently ensued as a result of the global
COVID-19 epidemic.
Gold prices have
also been boosted by the recent crash in the oil market, with prices plunging
by nearly 50% year-to-date as OPEC+ talks have stalled. Russia has
refused to cut its own oil output, angering Saudi Arabia in the process. The
Saudis on the other hand, feel that chronic overproduction has become a serious
problem and wants to further limit output among members to protect the group’s
interests as a whole. In response, Saudi Arabia has retaliated with a
scorched earth policy, drastically slashing prices for its buyers. The result
is that the lines have now been drawn for an ongoing price war between Saudi
Arabia and Russia.
Previously agreed
production limits among OPEC+ members expire at the end of the month, which
means that both Saudi Arabia and Russia can start pumping out as much crude oil
as they wish on April 1. Just the mere threat of a price war has further
damaged markets already shaken by the COVID-19 coronavirus, and a continuation will
mean even more severe geopolitical consequences.
Ali Khedery, a
former Senior Advisor for Exxon in the Middle East, feels that “$20 oil in 2020
is coming.” He goes onto explain that there will most likely be “huge
geopolitical implications. Timely stimulus for net consumers. Catastrophic for
failed/failing petro-kleptocracies Iraq, Iran, etc – may prove existential 1-2
punch when paired with COVID19.”
This is in contrast
to what experts originally predicted, which was a production cut to compensate
for a decline in global demand thanks to the coronavirus outbreak.
While the
combination of an oil war and the coronavirus could have continued devastating
effects on the stock and bond markets, it could do the opposite for gold.
The price of gold was up 5.8% just last week, and prior to the escalation of
the coronavirus pandemic, the all-time high mark of $1,895 suddenly wasn’t so
far off. While the climb to that zenith may be delayed for a few months
until the world can recover from the virus, the bullish momentum is still there
overall.
Gold has actually
been the only asset hanging on as of late, as S&P 500 futures were down
nearly 5% to start the week. Things didn’t get any better, as the stock
markets continued to slide as news of the pandemic worsened. Besides oil,
energy commodities have been struggling in general, with natural gas prices
falling due to a massive drop in demand. United States bond yields are
hitting new historic lows, with the yield on U.S. 10-year treasuries briefly
falling below 0.5% this past week. The “safe haven” benefits of gold are now
more apparent than ever, with the precious metal now poised for even more
growth
These negative
trends in the rest of the markets don’t look likely to change anytime soon, as
the situation with the coronavirus still continues to worsen. Up until
now, the markets have shown some resilience thanks to optimism that the
outbreak could be successfully contained. These hopes are evaporating more and
more every day though, with over 90 countries around the world reporting
confirmed cases of COVID-19.
Marc Chandler,
managing director at Bannockburn Global Forex, feels that “the containment of
the coronavirus has failed.” He adds that “the precise economic impact
may be unknown…but policymakers and investors do not need such precision. The
direction of the shock is clear. The magnitude is less known, but a
cursory look suggests the near-term economic impact is likely more moderate to
severe rather than minor.”
Chandler also
touched on what is perhaps the scariest element of the situation so far:
the unknown. Investors, particularly those in Europe and North America, don’t
fully understand yet how the virus will affect economic growth. Because
of this, the markets are still potentially weeks or months away from a full-on
panic, despite the heavy losses that we’ve already seen. What we are currently
seeing could just be the tip of the iceberg.
Long story short,
experts expect the price of gold to continue to stay strong as long as the
coronavirus is dominating the headlines. Fears of a global recession will
persist along with it, as interest rates approach zero or lower. All of this is
great news for gold, and the bullish signals show no signs of letting up.
More and more savvy
investors are stocking up on gold, and it’s not too late to get in at what is
still a relatively low level. Even if the coronavirus is eradicated in a
few months, many of the world’s top economies are still inching closer and
closer to an inevitable recession. By investing in gold, you’re not only
protecting your portfolio from the volatility of the markets, but you’re
setting it up for significant future growth, as well.
At Regal Assets, we
believe in providing you with trusted and proven precious metal investment
options. We take pride in the way we do business and have enjoyed helping
our clients grow their portfolios for over a decade now. Our expert team
members work side-by-side with you every step of the way, so you can be sure
that your wealth is safe and in a position to grow.
Signup and Get the FREE Investor’s Kit @ Regal Cryptocurrency and Gold Investment Kit. It explains Regal’s
IRS-approved investment options and how they work. 
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