In the last 24 hours, $16.5 billion in bitcoin options expired. Over the course of one hour last night, over $120 million in market cap was liquidated in cryptocurrency markets. Needless to say, bitcoin owners are on a roller coaster ride.
Roller coasters can be fun if you don’t mind neck-snapping zigs and zags, climbs and drops, and the occasional loop-de-loop. Don’t mind testing your limits? Try the wooden roller coaster at Canobie Lake Park in New Hampshire. But how many retirees are looking for volatility and enough G-forces to produce a reappearance of your last meal?
Most retirees are looking to get off the investment roller coaster. They’re more interested in stability than violent ups and downs. That can be one of the benefits of a balanced approach.
Harry Markowitz showed that diversification can both increase return and lower volatility in portfolios. His efficient frontier is an outline for investors looking to find their own risk tolerance.
Action Line: When you’re ready to get off the roller coaster, and you want to talk about your risk tolerance and diversification in your portfolio, email me at ejsmith@yoursurvivalguy.com. In the meantime, click here to subscribe to my free monthly Survive & Thrive letter.
Originally posted on Your Survival Guy.
