Cryptocurrencies are Not Viable Investments Says Finance Guru Matthew Mousa of TLK Partners
There are times when financial expert Matthew Mousa of TLK Partners is asked about cryptocurrencies, and when he does, he shakes his head. He’s among the serious analysts who believe cryptos aren’t for the serious investor. But cryptocurrency advocates are vocal, and Mousa feels that his customers are often drawn in by the hype.
Cryptocurrencies Are “Currencies” not Investments
The first point that Matthew Mousa raises is the fact that currency speculation can rarely be regarded as an investment of any kind. Speculation is gambling, and although you may have a marginally better chance with currencies than with card games, there’s a heavy element of chance. It’s also short-term, and Matthew believes that “solid wealth building” and “short term” are not phrases that should be mentioned in the same sentence.
So-called cryptocurrency investors can often be found using their phones to check the minute-by-minute fluctuations of their digital assets. For those who are serious about growing wealth, that alone should ring warning bells. “Investment is a longer-term position. You ride the highs, survive the lows and come out on top. It’s not something that should require constant vigilance,” says Matthew. “What we are seeing with binary options trading, currency trading, and so on is gaming, not investment.”
Cryptos Aren’t as Shady as They Were, But They’re Still Volatile
Cryptocurrencies are going mainstream. Blockchain technology makes transactions traceable, but there’s still the shady element. Of course, the same could be said of any currency, but enough potential for anonymity remains in cryptocurrencies to make it an attractive option for illegal transactions.
However, whether the business you do in cryptos is legal or illegal, you face the incredible volatility that has characterised these currencies from the outset. As Matthew points out, it’s a huge gamble from start to finish.
“You can hurtle up or downwards in value,” says Matthew, “and you won’t necessarily even know the reason for the fluctuation. We certainly wouldn’t recommend that our clients regard anything this volatile as an investment.”
You Can’t Strategise Around Cryptocurrencies
Investment, wealth preservation, and wealth building are all activities for the strategically-minded says Matthew. And since strategy takes planning and predictable outcomes, cryptocurrencies aren’t yet for the serious investor.
“All investments have an element of risk,” says Matthew,” but with mainstream investments we have years of performance to look back on, and we can make an educated guess as to how they’ll perform moving forward. With cryptocurrencies, on the other hand, not even the insiders know what they’re going to do next, when they’ll do it, and why.”
Don’t Buy Yet
Matthew believes that cryptocurrencies hold promise for the future and that they could ultimately become a viable global currency. But he doesn’t think they’re an investment, and he doesn’t recommend buying tokens just yet. “Yes, you’ll hear the stories of people who got a windfall, but you’ll hear that about lotteries too.”
Your financial future should be based on a sound strategy with as little as possible left to chance. “If you have the money and want to chance your dollars on cryptocurrencies, go ahead. It’s your money. But if you’re thinking of doing it because you think it might be a way to secure your family’s financial future, think again. There are better, surer ways to do that.”
Matthew Mousa is a partner at TLK Partners, a company that takes care of the wealth management and accounting needs of ordinary folk, small and medium businesses, and high value individuals.TLK Partners, Chartered Accountants and Wealth Management Company website, or call (02) 8090 4324.
This material is of a general nature only, it does not take into consideration your financial circumstances, needs or objectives. Before making any decision based on this content, you should assess your own circumstances, seek professional advice or contact our office to be directed to the appropriate professional. Whilst all care has been taken in presenting the material neither TLK Partners or its associated entities guarantee that the material is free of error and, the information may have changed since being published.
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