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Knowledge Knowledge Section. Recent Articles. The Ascent Knowledge Cryptocurrency. Image source: Getty Images. Don't put all your eggs in one basket. Here are a few: Some coins will fail. According to Coinopsy, over 2, cryptocurrencies have failed since the birth of Bitcoin in There are currently 10, on the market today -- and many of those have yet to deliver on the promises they made.
Whether it's through scams, poor management, or loss of traction, many cryptocurrencies will not make it long term. Regulation could change everything. The U. It is unlikely to follow China's example and seriously crack down on the whole industry. But it may restrict certain exchanges or certain types of cryptocurrency. And you don't want to be left holding digital currencies you can't access or trade. Your crypto exchange or wallet provider could be hacked or close down.
Most large cryptocurrency exchanges now have protections and insurance in place against hacking or theft. But a look at the crypto history books shows that exchange or wallet failure is not uncommon. If it happens to you, you don't want to lose the shirt off your back. Diversification matters Your first priority should be your emergency fund.
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The Motley Fool has a disclosure policy. Featured Articles. Best Cryptocurrency Apps. Best Places to Buy Bitcoin. Back to The Motley Fool. His investment record, however, is far less impressive. His most consistent recommendations are for gold, a position motivated by deeply held beliefs and his own self-interest. The core of Peter Schiff's notoriety in the investment world is his ability to regularly appear in respected, prominent financial news media.
His radio show, The Schiff Report , went off the air in , but survives today as a popular weekly podcast. He's published several books, all of which deal with the threat of an imminent crash in the U. His platform is a powerful tool to promote his economic and market forecasts. More often than not, Schiff uses this platform to tell investors that they should be buying gold.
It's no secret that Peter Schiff is bullish on gold. He has consistently criticized U. In that scenario, gold is his asset of choice to provide a safe haven for capital amid a collapsing world economy. To the casual observer, Schiff's omnipresent media persona can give credibility to his worldviews and stock picks.
He is a talented self-promotor. The reality, though, is that Schiff's worldview and forecasts, while consistent, have proven to be incorrect far more often than not. Investors should approach his advice with a large grain of salt. To the surprise of no one, Schiff's current list of stock recommendations are heavily concentrated in gold. The largest holding in Schiff's gold fund is Franco-Nevada Corp. Even Schiff's other funds, presumably those without an explicit focus on gold, are heavily dominated by companies with direct ties to the metal.
ABX data by YCharts. Schiff's public predictions, separate from his actual investing, have an equally bad track record. In , he predicted an economic collapse driven by hyperinflation in the U. It turns out that deflationary pressures were the bigger concern following the crisis, a reality that persists today. Or, consider his October statement on CNBC that investors "are going to be shocked at how inexpensive gold" was at the time.
Schiff is also quick to boast that he predicted the financial crisis, which he did, sort of, six years before the crisis actually started.
If you predict a recession every single year, eventually you're bound to get one right. He also predicted at that time that the Dow Jones Industrial Average would soon collapse from 10, to 2, Instead, the Dow has climbed to nearly 18, this year. There are countless other examples of Schiff recommending gold to protect investors from one false crisis after another. His consistency is remarkable, and seems to have no regard for contrary evidence or changes in economic and market conditions.
I think the reason is two-fold. First, Schiff seems to genuinely believe in his hypothesis. His father, Irwin Schiff, was a noted libertarian with an anti-establishment streak similar to his son's. His disdain for the federal government and Federal Reserve resulted in several stints in jail for a variety of run ins with the IRS, all driven by his staunch libertarian beliefs. Today, Peter Schiff carries the torch forward with as much enthusiasm as his father, albeit staying on the other side of the law.
I think Schiff genuinely believes what he says, however incorrect those predictions turn out to be time and again. Second, it's is critical to understand how Peter Schiff actually makes his money. There are the mutual funds managed by his brokerage firm, Euro Pacific Capital. Those funds charge fees on the capital invested, generally around 1. The funds are highly concentrated in the business of gold, making them a perfect place for fearful investors to park their capital after seeing Schiff on TV, online, or on the radio.
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