Fidelity recommends investors take 1-3% allocation in Bitcoin

LeoFinance
10 days ago
1 Min Read
293 Words

Bitcoin has come a heck of a long ways!

From primarily being an underground currency used for nefarious activities to a coin traded and adopted by cypher punks, to now being endorsed by the largest financial institutions.

Fidelity has roughly $3.3 trillion assets under management and has long been considering one of the best financial advisement firms in the world.

In a research report put out by one of their analysts yesterday, they concluded that the optimal risk adjusted portfolio included at least some bitcoin exposure.

They modeled different exposure levels to figure out which allocation might produce the best results.

Their model can be seen here:

image.png

(source: https://www.fidelitydigitalassets.com/bin-public/060_www_fidelity_com/documents/FDAS/bitcoin-alternative-investment.pdf)

As you can see, they didn't even go back to the very beginning of bitcoin, which would have produced even more mouth watering results.

They just focused on the last 5 years.

The results were clear...

While there was some deviation depending on whether you had a 1-3% allocation and whether you went back 1-5 years, the overall trend was pretty evident either way.

In almost every model they used, the portfolio performed better with some bitcoin exposure.

The overall conclusion was that the higher exposure to bitcoin and longer hold times produced the best results.

Who would have guessed?!

A model with 5% bitcoin exposure performed better than any listed in the chart above.

Their conclusion was that investors need to have at least some exposure to bitcoin in order to achieve the best risk adjusted returns.

The ideal allocation being somewhere between 1-5%, or as much as the client can comfortably hold.

image.png

(source: https://www.marketwatch.com/story/get-ready-for-the-investor-stampede-back-into-gold-commerzbank-2017-03-23)

The herd is coming...

Can you hear the low rumble of thunder in the distance?

Stay informed my friends.

-Doc

Posted Using LeoFinance Beta