Bitcoin continues to surge like there is no tomorrow, and as a result, many people enter the space without too much thought. However, according to certified financial planner Sophia Bera, there are several things one must do before they even consider participating in bitcoin and in the cryptocurrency space.
Sophia Bera: There are Tasks to Complete Before Participating at BTC
According to Bera, many of her clients have been asking several questions related to bitcoin of late given how the asset has recently reached a new high of about $ 40,000. Bera recognizes that bitcoin is expanding and that many people are likely to be worried about possibly losing out. However, it has a motto in situations like this: “Simple first, sexy later.”
What that means is that no matter how cool or hip a particular asset may look, it is always important to start an investment journey by simple means before being wrapped in something that someone is unlikely to understand the long term. She comments:
When people bring me bitcoin, I think many times what they really want is to start investing and they wonder what they should invest in.
While it’s not necessarily against bitcoin or investing in crypto assets, he says that if you’re relatively new to the investment space, there are several things you must do before considering a leading digital currency the world by market cap, and the first to fund your initial financial goals.
This could include anything from paying credit cards or student loans or starting a 401K account or retiring. She says it’s important to set yourself up financially before embarking on a long and complicated investment journey, which can ultimately hinder specific goals if the person is not fully prepared.
The next thing is to try to set up a diversified investment portfolio for yourself. Bitcoin, naturally, looks pretty attractive given how well it has done over the past few months, but traders should not turn their backs on things like standard stocks, exchange-traded funds (ETFs) ), index funds etc as these can potentially help someone. the portfolio remains safe and stable during volatile periods.
Next, she says only about five percent of their portfolio should be allocated in bitcoin. Invest more than that and investors are likely to take big chances given how risky cryptocurrency can be. Finally, it is important to fully understand that risk and know that nothing in the crypto space has ever been fixed.
Know the Risk
Even when we’re talking about individual stocks, we don’t want that to take too much of a portfolio, but individual stocks have even more longevity and history. They have money to supplement their value.