Why Investors Should Be Wary Of Bitcoin

By Gail MarksJarvis
Chicago Tribune

WWR Article Summary (tl;dr) According to personal finance columnist Gail MarksJarvis, a chat about bitcoin may make you think it’s time to buy; to get in as quickly as possible and enjoy a no-brainer investment. But beware. This copycat approach to investing has led to crushing losses for people tantalized by astronomical gains.

Chicago Tribune

You might be tantalized by the shocking rise in the value of bitcoin, but don’t let it sweep you off your feet.

This week bitcoin, a relatively young synthetic currency that people use to buy items over the web, made headlines after it hit an amazing peak in price of $4,726.

During this year alone, an investment in bitcoin gained 358 percent. You read that right. While the stock market is up about 10 percent for the year, which is a nice gain for stocks in just eight months, the money people have made in stocks is puny compared with what’s been made in bitcoin.

A quick 358 percent gain in anything is a rarity, and it gets people talking and longing for the bygone days when they could have made the same investment and achieved that return.

If you have a friend who ventured into bitcoin early this year, he or she is probably giddy and eager to talk about the newfound riches.

A chat about bitcoin may make you think it’s time to join your friend; to get in as quickly as possible and enjoy a no-brainer.

But beware. This copycat approach to investing has led to crushing losses for people tantalized by astronomical gains in the past.

Do you remember the housing crash of 2008, when the innocents who bought homes thinking they’d make a fortune on soaring prices ended up losing 30 percent on plunging home values?

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