Today might be the day that Mr. Shirts gets banned from the financial independence community, but how can you capitalize on the passive investment trend? Passive investing pushes capital towards companies based solely on a public stock’s total value and nothing else. We own some individual stocks, upwards of 20% of our portfolio. Why? Because there are occasionally opportunities for a long term investor to capitalize.
If you look at the major owners of public companies in their filings, specifically those that are no longer founder led, the top owners are usually the big four players in Index Funds
As the mania of Bitcoin continues (although it is down 33% from its highs as of December 22nd), I deliver to you the most recent bubble, precious metals. Ironically I’m writing this on a day where Gold is currently 30%+ off of its highs five years later and Bitcoin was down the same amount in one day!
On Tuesday, December 11th, the SEC issued a public statement for Cryptocurrencies and Initial Coin Offerings. I recommend anyone interested read this statement in its entirety.
Some particular highlights:
Investors should understand that to date no initial coin offerings have been registered with the SEC. The SEC also has not to date approved for listing and trading any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies. If any person today tells you otherwise, be especially wary.
I have always been a money nerd. In high school I was watching the market run up and people talk about technology and telecom stocks as the new tomorrow. My 62 year old grandfather had initially taught me about investing. He was nearing retirement after a long career in the late 1990s and was due two nice pensions in his future. Additionally, he had a small portfolio and just come into some money from the sale of his parents house. He was in leadership in General Electric, but decided not to stop moving with the company in his 40s when a division was sold then then put in another 10 years as an line engineer at another company in town. He had provided a solid middle to upper middle class upbringing for his four children and continued to generously support the family.
Cryptocurrency is all the rage of 2017. Bitcoin, Erethium, and ICOs.
What the heck?
You can’t venture on to any personal finance forum or twitter without seeing passionate arguments on either side. New age technology vs. beanie babies and tulip bulbs. At the time of writing, someone else is calling Bitcoin “the most obvious bubble of our lifetime”.
There is probably something to Bitcoin and cryptocurrency, especially as a means to store value for people in unstable countries. People have been using different means to store value since people developed an intermediary mean of trading. Civilization has moved from gold as a store of value to currencies backed only by the faith of a central government. If you’re in Venezuela, what options do you have? The government and government sponsored banking system is corrupt and if you hold physical money armed gangs come and steal it from you.