[ad_1]
Cathie Wood of Ark Invest believes that cryptocurrencies may soon be among the recommended portfolios for everyday investors.
What happened: In his most recent interview with CNBC, Wood even went on to say that currently volatile cryptocurrencies may soon stabilize and behave like bonds.
“We think it is becoming a new, more accepted asset class … We think it will behave, in fact, I would say more like the fixed income markets, believe it or not,” said Wood on CNBC’s Closing Bell.
Ark CEO notes that a typical investor portfolio consists of a 60% allocation to stocks and a 40% allocation to bonds.
“This idea of a 60-40 balanced portfolio is a bit of a problem,” she notes, explaining that bond prices are particularly high compared to history.
“We went through a 40 year bull market in bonds. We wouldn’t be surprised to see this new asset class make up those percentages. Maybe 60% in stocks, 20% in bonds, and 20 – in crypto, ”Wood said.
Why is this important: Retail investors have often been skeptical about allocating a percentage of their portfolio to cryptocurrencies due to their perceived risk.
However, more recently, some large retail investors have started making fairly large allocations to cryptocurrencies – one of them being billionaire investor Kevin O’Leary who recently disclosed a portfolio allocation of 3. % to cryptocurrency.
Analysts JPMorgan Chase & Co. (NYSE: JPM) also recently recommended a 1% portfolio allocation to cryptocurrencies to its clients.
However, Wood’s recommended 20% crypto allocation far exceeds what typical fund managers and investment banks have previously suggested.
Image: Cytonn Photography via Pexels
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
[ad_2]
Source link