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Fortune quarterly investment package released this week and it’s filled with tech stories.
This is probably not surprising given that tech stocks have been on the rise for quite some time now. The tech sector of the S&P 500 gained 44% last year versus 18% for the overall index. Collectively, the big six – Apple, Microsoft, Amazon, Google, You’re here, and Facebook – are now worth over $ 8 trillion. For some it is an obvious bubble, to others a logical answer to the COVID Year Winners.
With the great influence of technology on the stock market, I benefit indirectly and so will you most likely. All of my investments are in mutual funds, mostly low cost index funds, and they’re complemented by the big six and other tech high-flyers.
Well, not exactly all of my investments. About two months ago I was using the PayPal app to pay for something or whatever, probably a bag of coffee beans that I saw on Instagram, when I noticed the company had promised the digital currency exchange has become operational. From the app, with a few clicks, I could buy and sell Bitcoin, Ethereum, Bitcoin Cash and Litecoin. This new level of exposure to the general public and the ease of purchase seem likely to push prices up, I reasoned. So I bought a small mixed basket of crypto… and watched it start to go up.
A week later, I was bragging to family about my success and noticed that the power to dial in my 10% gain – if it was annualized over an entire year – would make us rich. I was asked to put a little more money on the line, say enough to buy a family of five at one of Boston’s best restaurants with healthy drinks, desserts, and tip.
PayPal must be thrilled with the response to its addition of crypto, as I have started checking the app at least once a day. And we went to the races. At the recent Bitcoin price peak of nearly $ 42,000 in early January, I was on the verge of tripling my investment.
Money aside, it was more entertainment and bragging rights than a serious foray into digital currencies, a consequence of how newsletter scribe Matt Levine calls the stock market a “fun casino.”“So I had no interest in selling. The recent drop in Bitcoin has also hit my PayPal casino with delight. I have now only doubled my money. Maybe i should have listened to astrologer / bitcoin strategist Maren Altman?
Among the more serious investors remains the most serious question: should you add Bitcoin to your portfolio in 2021? As one of the best journalists covering crypto, Robert was on the case for another story in our investment package.
There has long been a strategy of investing in assets that will thrive in tough times. When all of your stocks go down, treasury bills, foreign currencies, and gold can provide you with a cushion of safety. Could Bitcoin Do The Same? Is the ultimately capped number of total Bitcoin that can be mined a hedge against the Federal Reserve’s seemingly endless ability to strike more dollars? Robert offers both sides of the debate, although a recent analysis by JPMorgan Chase strategists John Normand and Federico Manicardi firmly joined the skeptics. Bitcoin is the “least reliable hedge during times of high market stress,” they wrote alas.
Still, I have a very good place in the fun casino. Have fun this weekend and we’ll see you here on Monday.
Next Wednesday, Jan. 27, at 11 a.m.ET, Fortune hosts CIO roundtable on COVID and the cloud, accelerating conversion and finding value, with Accenture CIO Penelope Prett and Zoom Global CIO Harry Moseley. The event is by invitation only and we are almost at capacity, but you can register for consideration.