We wonder if “10% for the Big Guy” extends to election campaign donations.
According to Bloomberg:
Groups allied with [President Joseph Robinette] Biden have already committed to spending more than $700 million to help him beat Donald [John] Trump in the 2024 election… That’s in addition to the $130 million his campaign reported having on hand at the start of February.
Whatever else, you’ll never hear anyone say that being in politics “doesn’t pay.”
Anyway, on with the show…
Market Data
The S&P 500 closed up 0.5% to end the day at 5,096.27… the NASDAQ added 0.9% to close at 16,091.92.
In commodities, West Texas Intermediate crude oil trades at $78.28, down eight cents…
Gold is $2,052 per troy ounce, up $10 from yesterday…
And bitcoin is $61,319, down $944 since yesterday.
And now, back to our story…
Here’s How You Add Crypto to Your Portfolio
One thing that sure has paid over the past couple of months is Bitcoin.
Since the start of the year, the so-called “worthless giant Ponzi scheme” – or whatever label most in the mainstream like to attach to it – has gone from $42,303 to (as we write) $61,319.
And over the past year, it has gone from a low of $19,578.
That’s a 213% gain.
That beats the socks off the S&P 500, which is up just a mealy-mouthed 34%. Why bother?
We kid. Of course, in all honesty, we should stop comparing stock market performance with Bitcoin or crypto performance. It implies you should invest in one or the other…
That you should sell all your dividend and growth stocks and buy Bitcoin instead… or vice versa.
The reality, of course, is that they are complementary assets. How you complement them is up to you. Even the Johnny-come-lately’s on Wall Street say you should have 1-5% of your assets in Bitcoin.
Others, at the extreme, would say you should have 60% or more in Bitcoin. Personally, we wouldn’t recommend going that far. Mostly because it’s not necessary from a risk/reward perspective.
So what should the “number” be?
Again, that’s up to you. But a useful guide is using the “10×10” Approach we mentioned last week.
As a refresher, the “10×10″ Approach is a simple way to allocate capital across a range of assets. These can be speculations, or they can include more conservative assets.
The point is that you divide your capital equally across 10 different themes. Within those 10 themes, you then choose up to 10 individual investments and allocate cash among those investments.
Strictly speaking, you should allocate the cash equally, but you don’t have to. For instance, most folks consider Bitcoin to be the “safest” of the cryptocurrencies with Ethereum a close second.
So, using our “10×10” Approach, instead of allocating equally across 10 cryptos in one of our funnels, you could (for instance), allocate 40% to Bitcoin, 20% to Ethereum, and invest the remaining 40% into eight different (and more speculative) cryptos.
In your other funnels, maybe you have 10 artificial intelligence (AI) related stocks. There’s a whole bunch out there. It wouldn’t be hard to pick 10. Again, maybe you have a higher weighting for a couple of them and put smaller amounts into the more speculative ideas.
The same even with dividend-paying stocks. We’ve written about that previously, with the “necessities” and “habits” ideas. In this case, you could put equal amounts into seven or eight really solid dividend payers.
For the other two or three, maybe you look at something a little riskier… paying a slightly higher dividend yield. It could be a beaten-down REIT (real estate investment trust) or a small-cap dividend stock – the kind of stocks most investors don’t notice.
For the rest of your funnels, there are so many other ideas to choose from… tech stocks, uranium plays, REITs, small-caps, microcaps, high-yielding stocks, BDCs (business development companies), and so on.
You could even go “off-piste” and look at collectibles and so on.
There are so many ways to fill in each of those funnels. And remember, you don’t have to do it all at once. You build a funnel as you see a trend and an idea develop.
The beauty of investing this way is that it can give you the confidence and the comfort to get into seemingly edgy ideas early on… because you don’t feel as though you’re over-exposing yourself to something.
After all, with 10 funnels and a maximum of 10 investments in each, each position is (on average) only 1% of your overall portfolio. By getting into it slowly and over time, you’re putting relatively small amounts of capital at risk, and if it’s clear the idea isn’t working out, what’s the damage?
Likely not much at all. You can get out and move on to the next idea.
To us, that’s the best way to play Bitcoin, crypto, and other speculations (and your overall portfolio). With that approach, it should give you the confidence to try new ideas, while at the same time not taking outlandish risks.
As for Bitcoin, guess what, it’s probably still not too late. And as crypto enthusiasts often say, “Where goes Bitcoin, the alt-coins soon follow.”
Well, Bitcoin is up more than 200% over the past year. Perhaps it’s time for the alt-coins to follow.
More Markets
Today’s top gaining ETFs…
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KraneShares MSCI China Clean Technology ETF (KGRN) +3.7%
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Global X Lithium & Battery Tech ETF (LIT) +3.6%
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VanEck ChiNext ETF (CNXT) +3.2%
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iShares Semiconductor ETF (SOXX) +2.7%
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U.S. Global GO GOLD and Precious Metal Miners ETF (GOAU) +2.4%
Today’s biggest losing ETFs…
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Invesco Dorsey Wright Healthcare Momentum ETF (PTH) -2.4%
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Siren Nasdaq NexGen Economy ETF (BLCN) -2%
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First Trust Brazil AlphaDEX Fund (FBZ) -1.1%
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VanEck Indonesia Index ETF (IDX) -1%
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Vanguard Health Care Index Fund ETF Shares (VHT) -1%
Cheers,
Kris Sayce
Editor, The Daily Cut