Bitcoin continues on the path to greater mainstream acceptance as a core portfolio asset. This week, Fidelity added modest bitcoin exposure to their all-in-one asset allocation ETFs. The bitcoin weighting is at 1%, 2% or 3% depending on the portfolio risk level. These ETFs might be a way to dip your toe into some bitcoin exposure. You will see the effect over time. Historically it did not take much for bitcoin to have a very positive effect on balanced portfolios. And of course, bitcoin is highly volatile and rebalancing is key. Fidelity is adding bitcoin to balanced portfolios on the Sunday Reads.
Here’s a post that outlines the bitcoin exposure.
Chris Pepper, vice-president of corporate affairs at Fidelity, said that, subject to regulatory approval, the all-in-one balanced fund will have an allocation of approximately 2% to the Bitcoin fund, while the growth fund’s Bitcoin allocation will be around 3%. Fidelity is filing prospectus amendments in the next 10 days, he said.
And here is the link to the Fidelity ETFs.
Readers will know that I am investing in bitcoin at a 5% portfolio weighting.
Here’s a post that demonstrates the historical effect of bitcoin on a balanced portfolio.
Of course, this is not advice. Do your own research and decide if you want an allocation to bitcoin. I’m in for the long haul. That said, on Twitter I suggested …
My MoneySense weekly column
In Making Sense of the Markets for the past week we have the earnings season halftime report, inflation is up, up and away, and we’re also building a more recession-resistant portfolio.
On this site, this week, I had a simple solution if stock markets have you spooked.
More Sunday Reads
Here’s a very good post from CTV News that outlines the run up in Canadian house prices and what might happen for homeowners and prospective homeowners in the rising rate environment that is likely to come. Here’s a headline from that article.
Canada has the highest housing debt to disposable income amongst all G7 nations
And a troubling fact …
Major players in the mortgage market are investors, who are increasing their share in the housing market during the pandemic.
And this could be bad news for speculators, but good news for those looking to purchase a home.
The report by the Bank of Canada noted that while investors are an important source of housing rental supply, they could also be a source of instability for the financial system and the economy as a whole since they can exacerbate boom-bust cycles in housing markets.
On My Own Advisor, more volatility is on the way in the weekend reads.
Here’s a fantastic retirement post on Million Dollar Journey. Kyle looks at the safe withdrawal rates and so much more. That is a must read. I would always add that a retiree consider the real inflation protection that you’ll find in the new balanced portfolio.
On FiPhysician, doc looks at taming that sequence of returns risk (for the retiree) by de-risking and then introducing an equity glide path. That is a wonderful consideration.
Fritz on The Retirement Manifesto writes about getting the courage to jump into retirement.
On Findependence Hub, advisor John DeGoey fought the fed and admits that he lost, for now. From DeGoey …
The fed won. I admit defeat. My point is that what just transpired was merely the most recent bout. Circumstances were extenuating. I demand a rematch. As soon as things begin to normalize, I absolutely believe I will win.
On Tawcan, Bob writes …
Of course, FIRE stands for
From Bob, on the FIRE movement.
Almost all of these articles only focus on the early retirement aspect and provide a false image of relaxed and luxurious life in retirement – travelling around the world, leaving the 9-5 rat race, saying FU to the employers, and sipping piña colada on the beach. Early retirement is all fun and games. There are no drawbacks and no negatives to early retirement.
It is true, that so few are likely to really FIRE. And a major stock market correction or recession would send most of them back to work, if boredom doesn’t get them first.
Bob adds …
They tell themselves that they will only be happy once they are retired. Before they get there, they will never be happy. They constantly remind themselves how miserable their life is and how wonderful their life will be once they are free from their 9-5 job. So, they constantly look forward to that retirement day so they can give their employers the middle finger and tell their coworkers to get lost.
There is a great weekly earnings summary and more on Dividend Hawk – the week in review. You’ll find links to Hawk’s favourite blog posts from the week.
Here is the dividend update on GenYMoney.
Banker on wheels suggests you take a look at these charts before you consider trying your hand at building a stock portfolio. It’s true, it does take some considerable research before one builds that simple stock portfolio. I am comfortable holding stocks and ETFs.
Most investors might be better of holding a simple and managed asset allocation ETF portfolio.
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