My response to an unconvincing argument.Speculation is not an all or nothing proposition: it comes in degrees. So, something being a speculative asset doesn\u2019t by itself mean there\u2019s no utility full-stop. In a sense, all investments have at least some degree of speculation, because nobody knows with certainty what the future holds.\u00b9Also, something being speculative doesn\u2019t mean you shouldn\u2019t invest a small amount of money into it. If you think something is risky, that doesn\u2019t mean you don\u2019t put any money into it. It means you don\u2019t make foolish decisions like putting your all your life savings into it, particularly if you don\u2019t know anything about what you\u2019re investing in.It\u2019s not a competition. A portfolio should have a little bit of money in super speculative assets. People want to talk about risk, but risk is tied to reward. In addition, you want to hold multiple assets that are uncorrelated with other assets.You can have your retirement portfolio be totally made up of index funds. But you can ALSO have another portfolio that is more actively managed and includes some speculative asset like cryptocurrencies, or more risky products like actively managed mutual funds or single stocks.So, at bottom, these crypto skeptics are asking us to accept a false choice: either put all\/most of your money into crypto or don\u2019t put anything into it. Hardly an appropriate objection, especially in light of modern portfolio theory and diversification considerations.\u00b2Footnotes\u00b9 It\u2019s not just that we don\u2019t know the future with certainty. But often times, we can\u2019t assign probabilities at all, so we are totally in the dark. \u00b2 I\u2019m not a financial advisor. My purposes are entertainment.Photo by M. B. M. on Unsplash<\/p>","protected":false},"excerpt":{"rendered":"
My response to an unconvincing argument.Speculation is not an all or nothing proposition: it comes in degrees. So, something being a speculative asset doesn\u2019t by itself [...]<\/span><\/p>","protected":false},"author":0,"featured_media":2796,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/posts\/4437"}],"collection":[{"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/comments?post=4437"}],"version-history":[{"count":0,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/posts\/4437\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/media?parent=4437"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/categories?post=4437"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/afluxcoin.com\/ar\/wp-json\/wp\/v2\/tags?post=4437"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}