I know, I know; you don’t think that this will be a fair fight. Stocks have been around for a long time, and cryptos have been kicking for about ten years and are only recently becoming mainstream.
However, when it comes to your money, everything is equal. Remember, all these investment sources are fighting for your hard-earned dollars. So, let’s do a quick rundown of what each investment brings to the table. Stocks will win; however, we do need to decide what our allocation of each will be. I will give what percentage I have in each at the end. Let’s get into the battle of the ages.
Capital Gains. Capital gains are the speed and velocity at which your investments go up in price. Crypto easily wins this battle because it can quickly go up 30% in a day. If you want a wild ride, go with crypto. However, what goes up can come down. Crypto, in its current state, can crash violently at a moment’s notice. You’ve been warned. Winner: Crypto.
Become a Bonafide Investor part I: Investing Insider vs. Outsider
Dividends. Stocks have the best history for dividends at the moment. For over 100 years, dividends have been making consistent investors rich. Crypto does have some good deals in interest rates. I am currently receiving 9% interest in my investment in USDC, a stable coin. Every month, the interest rates can change, so I do not know how long this particular deal will last. I love the interest in crypto, but I will have to go with stocks on this one. Winner: Stocks.
Research capabilities. To make great investments as an investor, you will need to conduct research (or due diligence). Stocks have the most research, safest websites and information, and longest history. Crypto is starting to gain reputable sources as well. But if you are getting started, I would start with stocks. Winner: Stocks.
Ease of starting. Stocks have some of the best websites and apps to get you started. For example, M1 Finance will let you place many stocks into a pie. Let’s say a pie of McDonald’s, Starbucks, Target, Walmart, and Papa John’s (all stocks I own!).
Dividends vs. Royalties part II
Okay, now that I have my pie, I can set up M1 Finance to withdraw a set amount (say $300) from my checking account every month. It will then spread my money across the stocks, buying the highest amount of best-priced ones. I am automatically investing in top stocks at the best prices—it is hard not to win!
Crypto doesn’t have anything close to this. Crypto, currently, is all about capital gains and not long-term dollar-cost averaging. I believe that over time crypto will stabilize and become more of a buy-and-hold commodity, like stocks. But for now, stocks have it beat with apps like Stash, Cash App, and M1 Finance. Winner: Stocks.
Cool Features. OMG, crypto wins this, hands down. There are so many cool things to do in crypto; it is insane. First off, you can trade your crypto with anyone. So I can send some Ether (ETH) to anyone I want. Stocks are locked down under your social security number.
Crypto also has many cool gimmicks, depending on the coin. Some can be mined or staked for extra dividends. Some coins go out and search for more yield. There is a coin that will act as an ETF and invest in stocks. There is so much new stuff in crypto that you will have to read every day to keep abreast of everything. Winner: Crypto.
Hustle in Your 20s and 30s, Enjoy your 40s and 50s
Future Outlook. Stocks will be in the same place today as they will be tomorrow. Nothing new will happen in the stock market space. It is old money but still extremely necessary for businesses to have liquidity.
This crypto timeframe is currently akin to the internet in the 1990s. We have no idea of what will happen, but I will say that it will be huge. The crypto genie has been let out of the bottle, and it will not go back in. However, it will have many fits and starts along the way. Remember, Microsoft, Apple and Amazon were trading at their low points at one time or another. You have to maintain a long-term outlook to ride this wave. Winner: Crypto.
Final Allocations. You need to allocate most of your dollars to stocks right now and probably for the next 15-20 years. How much you allocate depends on how bullish you are on crypto and how strong your tolerance is for daily volatility.
If you are investing for capital gains and your stomach turns on crashes of 20% or more, I would keep your allocation at 5%. Right now, crypto is 90% speculation. You can make a killing one day and be killed the next day.
If you are an investor looking at where crypto will be in the next 20 years, you can allocate more. I am thinking about 10%, but only if you can stand horrible crashes. Ensure you are investing in coins that have an actual purpose, and you should be fine.
I am putting about 7-10% in cryptos. I have a nice-sized dividend portfolio now, so I want to grow my crypto portfolio and better position myself for the future wave of technology. Okay, how do you begin your journey in either stocks or crypto? Luckily I have written some articles to get you started. Good Luck!
Stocks: Stock Market Investing 101 Series, Preferred Shares 101, Introduction to REITS series, and Investing for Dividends series.
CryptoCurrency: CryptoCurrency 101 Series.
Read My Books for Free: Free Kindle Books Schedule also on Kindle Unlimited Join me on the best app for Crypto- Voyager
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20 Books that Will Make You Rich (here) part 2 (here)
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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