What is the Best Investment of the Last 20 Years?
I'm sure you've seen all the headlines about Bitcoin and other cryptocurrencies, but what does it actually mean for your investments? Here are four popular investment options and how they would have fared in the last 20 years.
Bitcoin
Bitcoin digital currency, which means it can be used to purchase goods from other people. It is not backed by any government or central bank, and it is not governed by any government agency. This distinguishes Bitcoin from the other investments on this list; because there are no rules, you can buy and sell as much as you want without paying taxes on it.
Bitcoin has been around since 2009, and its value has increased more than 20-fold in that time!
If you want to invest in Bitcoin but don't know where to start, go to Coinbase — a company that makes buying and selling Bitcoin simple for anyone interested in cryptocurrency.
Stocks
If you've been investing for 20 years and have a well-diversified portfolio, your stock holdings are likely to have returned at least 5% per year. That is not at all bad! After all, a 5% annual growth investment will be worth three times its original value in 20 years. If a fund manager could have outperformed the market by just one percentage point (6%), you would have earned $30 billion more than the average investor who simply bought and held the same stocks.
So there are two ways to look at this:
You could be pleased with your 6% return on investment and congratulate yourself on being an above-average investor (and, to be honest, most of us probably would).
Or you may feel that "meh" isn't good enough, especially when it comes to money management, and wish to manage some of those assets yourself.
Gold
Gold is an excellent investment for a variety of reasons. For starters, it has been used as a form of investment for thousands of years. Second, it protects against both inflation and deflation. Third, it protects against market crashes, geopolitical upheaval, and financial crises.
Cash
What has been the best investment over the last 20 years?
The answer may surprise you: money.
Cash, also known as "cash and equivalents" on an investment statement, is a good way to diversify your portfolio while also protecting yourself from market volatility. Depending on where you live and which currency you prefer to use in daily life, cash can be invested in either US dollars or foreign currencies such as the euro or yen.
Bitcoin by far
When it comes to investing, you have many options: stocks, bonds, and mutual funds. But what has been the best investment over the last two decades? Bitcoin is by far the best long-term investment option (think decades).
Indeed, bitcoin outperformed all other investments during that time period and continues to soar today. The cryptocurrency's value has more than tripled in the last year alone, reaching an all-time high of $8,000 per coin — a price point that most people would have considered unthinkable just five years ago, when it was trading at around $10 per coin.
So, what made it so popular? First and foremost: It is a decentralized currency, which means it is not controlled by any government (like American dollars are). With no central bank or federal regulator overseeing it—and no single person or entity backing its value—bitcoin is completely free of regulation, making investing much less risky than putting money into stocks or bonds, the prices of which can be affected by political decisions or economic factors beyond their control.
If you had invested in Bitcoin at the beginning of 2017, you would have made a substantial profit by now. In fact, if you had invested $100 in bitcoin back then, it would now be worth more than $1,900, a more than 1900% increase. This is a fantastic return on investment! However, keep in mind that investing in cryptocurrencies can be risky. There is no guarantee that your money will be returned if something goes wrong with your transaction or exchange site.
Source: investopedia.com