Investors who are nervous about the stock market may be looking for alternative investments like Bitcoin. However, when considering cryptocurrencies, it is important to consider their general Portfolio objectives and your Risk tolerance rate. Both Bitcoin and stocks have their advantages and disadvantages, and portfolio diversification can be quite interesting for one or another investor. However, you should first think carefully about the risks that the respective assets entail, explore the respective financial markets and ultimately ask yourself the question: What suits me better?
Buy stocks: the risk behind stocks
Investments carry risks. The market can crash for various reasons. Companies could go bankrupt. Or in a positive sense, a stock could rise over time. Balancing risk is important if you decide to add various assets to your portfolio. But what stocks to buy now? However, one thing is certain: individual stocks carry greater risk than a diversified portfolio. After all, there is always a risk that the stock will not increase in value, the company will not grow, or dividends will be cut.
However, there are risks with many investments, but with stocks they are different because there are other guidelines. It is important to learn about the stock market in advance in order to understand which stocks to buy. Tip: It is important to understand the financial health of the company – it helps to take into account the price-earnings ratio. You should also understand other important key figures before you want to buy shares.
Buy Bitcoin: the risk behind Bitcoin
Cryptocurrencies in general are speculative and based entirely on supply and demand. All cryptocurrencies are based to some extent on what people are willing to pay – but with Bitcoin this is a little different. In contrast to other fiat currencies or commodities such as gold, the market of Bitcoin is smaller in terms of its overall size, which is therefore also subject to greater fluctuations.
Bitcoin as well as other cryptocurrencies are highly volatile and have already shown us in the past that price crashes can occur within a few minutes. Just recently, Bitcoin crashed after technical failures shortly after being introduced as an official means of payment in El Salvador. After previously breaking the $ 50,000 mark, Bitcoin is still at $ 46,469 today. Accordingly, shares could be more interesting for some investors, as they are far less speculative than, for example, Bitcoin.
What stocks to buy now?
Which stocks should you buy now? After all, for most investors, stocks are quite suitable.
“Stocks should be the main focus of a portfolio for most people. You can determine a profit based value and stocks are a stable investment because of the underlying characteristics.“
In addition, it can be assumed that most companies themselves with some short-term volatility likely to exist in the future and therefore provide stability. Especially if you invest in a broad-based index fund or Exchange Traded Funds (ETFs) investing, which consists of stocks, there is a good chance that you will be fine in the long run.
Depending on the willingness to take risks and the capital invested, one has the opportunity to diversify one’s portfolio with shares. For example, you can Buy Hydrogen shares, because these usually bring a good return. But also the Apple Stock, Amazon stock, Tesla Stock and Microsoft Share are good tips.
Conclusion: Why Stocks are as Good an Investment as Bitcoins
When it comes to investing in Bitcoin, one of the biggest dangers is that the cryptocurrency could eventually disappear. It’s easy to replace Bitcoin with an alternative because there are thousands to choose from. That’s why it might be worth investing in stocks. Because stocks have been around since the 18th century-Bitcoin, on the other hand, is a relatively new asset that emerged in 2009. The story is just not there for Bitcoin if you like a long-term track record.
Another danger is that Bitcoin will not be subject to the same scrutiny by the Securities and Exchange Commission (SEC) as regulated securities markets such as the stock exchange. In general, we advise all investors to carefully study all the advantages and disadvantages of Bitcoin and shares and to set up their own risk management. Take time to research and then decide if Bitcoin or stocks is the better investment for your portfolio.
Last updated on September 10, 2021
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Cryptocurrencies are a highly volatile, unregulated investment product. Your capital is at risk.