4 ms·

Is anyone (who is paid/lives in the US) concerned about the future value of USD? A lot of my friends are saying I should be investing in cryptocurrencies for fu

Is anyone (who is paid/lives in the US) concerned about the future value of USD? A lot of my friends are saying I should be investing in cryptocurrencies for future safety, but I don't see those as very stable, so I'm hesitant to put my savings into it.

jlmorton 6y ago
There are all sorts of inflation-protected assets you can buy. At a basic level, any durable asset will provide inflation protection. But you could also buy things like Treasury Inflation-Protected Securities.
scsilver 6y ago
I think the safest dollar hedges right now are bluechip tech stocks and a forever home(if you need one and get take advantage of rock bottom rates)
- bpodgursky 6y ago
  I don't know why you'd say tech stocks (where volatility is high) but land and safe equities are the traditional hedges yes.
  - anoraca 6y ago
    They said bluechip tech stocks. Companies that have been around for decades and aren't going anywhere. Microsoft, Apple, Amazon, Intel, etc.
    - unishark 6y ago
      They could go also back where they were a year ago and lose half your money. Then enjoy a lost decade of no recovery as the US piles up Japan-style debt. Not making a prediction, just saying what goes up fast can also come down just as fast. For less narrow stock choices, there's whole index funds, both domestic and international. Also bond funds.
- scudd 6y ago
  What if you don't need a home, but could realistically finance one? Is there incentivisation in real estate over stable(-ish) equities if you're not looking for a long term home for yourself/family
  - scsilver 6y ago
    The only advantage I see is that huge amount of capital you can borrow at a low rate, probably lower than the rate of a weakening dollar, and could potentially turn it into a rental to pull in inflation adjusting income, in addition to your fixed work income. That said, pulling your down payment out of rising stocks to do so may not be the most profitable, but it does serve as a good diversification of asset. Im not a financial advisor, just a software engineer, but my father is and I've convinced him into buying a second home with me when the right one becomes available (waiting for the supply to open up a bit, we lost our first offer to a cash offer). Key points for purchasing were diversification of assets, pulling out some money from the high riding market before a blue sweep and subsequent taxes, and rates so low that combined with inflation(including assets) the gov is paying you to take out a loan.
companyhen 6y ago
1-10% into crypto is fine as long as you invest in the bluechips (Bitcoin and Ethereum) depending on your risk tolerance. Don't go all in, and dollar cost average.
qw3rty01 6y ago
Cryptocurrency is certainly not a good place to put savings, as its price is way too unstable to be a store of value. If you're unsure about the value of the USD, then traditional investments like gold would probably be a better choice. Like other comments mention, even though lots of money was created for economic stimulus, it's used in such a way that makes it deflationary long-term (as seen by the projected 0.62% inflation rate for this year and only 2.24% next year[1]). [1] https://www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/ https://www.statista.com/statistics/244983/projected-inflati...
- mcfly1985 6y ago
  > Cryptocurrency is certainly not a good place to put savings Found the short-sighted sheep.
BitwiseFool 6y ago
I am, and have been dedicating about 20% of each paycheck directly into Bitcoin.
- cultus 6y ago
  This really isn't a rational thing to do as an individual. You aren't going to beat more sophisticated players.
tylerhou 6y ago
If you're concerned about the USD and you want a low-risk way to invest your money, you could invest in a basket of foreign bond funds: https://investor.vanguard.com/mutual-funds/profile/portfolio/vtabx https://investor.vanguard.com/mutual-funds/profile/portfolio...
staticman2 6y ago
If you are concerned about USD buy international index funds. Cryptocurrencies are gambling. I would not go for that.
cultus 6y ago
Investing in crypto is always nuts, but especially if you are trying to reduce risk. Don't listen to your friends. Buy index funds, with more into bonds if you really want less risk. You won't ever beat the market on average as a retail trader.

jlmorton 6y ago

There are all sorts of inflation-protected assets you can buy. At a basic level, any durable asset will provide inflation protection. But you could also buy things like Treasury Inflation-Protected Securities.

scsilver 6y ago

I think the safest dollar hedges right now are bluechip tech stocks and a forever home(if you need one and get take advantage of rock bottom rates)

bpodgursky 6y ago
I don't know why you'd say tech stocks (where volatility is high) but land and safe equities are the traditional hedges yes.
- anoraca 6y ago
  They said bluechip tech stocks. Companies that have been around for decades and aren't going anywhere. Microsoft, Apple, Amazon, Intel, etc.
  - unishark 6y ago
    They could go also back where they were a year ago and lose half your money. Then enjoy a lost decade of no recovery as the US piles up Japan-style debt. Not making a prediction, just saying what goes up fast can also come down just as fast. For less narrow stock choices, there's whole index funds, both domestic and international. Also bond funds.
scudd 6y ago
What if you don't need a home, but could realistically finance one? Is there incentivisation in real estate over stable(-ish) equities if you're not looking for a long term home for yourself/family
- scsilver 6y ago
  The only advantage I see is that huge amount of capital you can borrow at a low rate, probably lower than the rate of a weakening dollar, and could potentially turn it into a rental to pull in inflation adjusting income, in addition to your fixed work income. That said, pulling your down payment out of rising stocks to do so may not be the most profitable, but it does serve as a good diversification of asset. Im not a financial advisor, just a software engineer, but my father is and I've convinced him into buying a second home with me when the right one becomes available (waiting for the supply to open up a bit, we lost our first offer to a cash offer). Key points for purchasing were diversification of assets, pulling out some money from the high riding market before a blue sweep and subsequent taxes, and rates so low that combined with inflation(including assets) the gov is paying you to take out a loan.

companyhen 6y ago

1-10% into crypto is fine as long as you invest in the bluechips (Bitcoin and Ethereum) depending on your risk tolerance. Don't go all in, and dollar cost average.

qw3rty01 6y ago

Cryptocurrency is certainly not a good place to put savings, as its price is way too unstable to be a store of value. If you're unsure about the value of the USD, then traditional investments like gold would probably be a better choice. Like other comments mention, even though lots of money was created for economic stimulus, it's used in such a way that makes it deflationary long-term (as seen by the projected 0.62% inflation rate for this year and only 2.24% next year[1]). [1] https://www.statista.com/statistics/244983/projected-inflation-rate-in-the-united-states/ https://www.statista.com/statistics/244983/projected-inflati...

mcfly1985 6y ago
> Cryptocurrency is certainly not a good place to put savings Found the short-sighted sheep.

BitwiseFool 6y ago

I am, and have been dedicating about 20% of each paycheck directly into Bitcoin.

cultus 6y ago
This really isn't a rational thing to do as an individual. You aren't going to beat more sophisticated players.

tylerhou 6y ago

If you're concerned about the USD and you want a low-risk way to invest your money, you could invest in a basket of foreign bond funds: https://investor.vanguard.com/mutual-funds/profile/portfolio/vtabx https://investor.vanguard.com/mutual-funds/profile/portfolio...

staticman2 6y ago

If you are concerned about USD buy international index funds. Cryptocurrencies are gambling. I would not go for that.

cultus 6y ago

Investing in crypto is always nuts, but especially if you are trying to reduce risk. Don't listen to your friends. Buy index funds, with more into bonds if you really want less risk. You won't ever beat the market on average as a retail trader.