Investing in Cryptocurrencies or Stocks?

27 January 2021

Investment Guide for Millennials

Millennial Investors who are looking to invest their N$ are faced with a much more diverse investment landscape than their parents.
With alternative investments like cryptocurrencies like Bitcoin available online, it’s important for Millennials to assess their overall investment portfolio goals and their appetite for risk.

The question remains, should Millennials invest in stocks or cryptocurrency?

Weighing Your Risks
Whilst all investments carry risk, the market could crash for various reasons. Companies could go bankrupt. Or, in a positive sense, a stock could soar over time. Weighing risk is important when you decide to add different assets to your portfolio.

Cryptocurrencies are speculative, completely based on supply and demand. Unlike other currencies like the dollar or gold, it’s a much smaller market regarding its overall size, so it’s more subject to fluctuations.

The Volatility Factor
Cryptocurrency shouldn’t be the only focus of a Millennial’s investment strategy. It’s mostly a decision around how much risk one currently has, and whether one’s comfortable with losing that amount in one’s portfolio.

Bitcoin‘s volatility can mean growth of N$0 or up twentyfold.

What percentage of a Millennial’s portfolio should be spent on cryptocurrencies, depends on one’s risk tolerance. 

Even with some short-term volatility in the markets, most company stocks will likely exist in the future and, therefore, provide stability. By investing in stocks, it’s highly likely that investors be fine in the long run.

The Price Factor
According to Forbes, Bitcoin has now surpassed $40,000 per bitcoin for the first time ever. (Forbes, 2021) This makes the price of entry into Cryptocurrency investments affordable for only a limited few.

Whilst entering the stock market is possible at various price points and the risk options are endless, making it an affordable alternative for entry-level investors.

In short, whilst Cryptocurrency is an attractive investment option for Millennials entering the investment market, investors face the risk of high volatility, high price points, and a lot more risks than investing in traditional stock options.

For more information regarding investments with Momentum, leave a comment with your contact details or refer to your nearest broker for more information.
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