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The Daily Cardinal Est. 1892
Tuesday, January 26, 2021

College 101: Alternative Investments and an Uncertain Era

I'm not super great with money and investments, but I know enough to be nervous right now. It seems like everything is going down: stocks, bonds, you name it. I don't have a ton of money (I spent my last summer interning for a New York law firm, but it didn't pay much), but I do want to make sure that I make the most of my money.

What I've heard is that the best recession-proof investments are precious metals, gems, and cryptocurrency. Is this true? Am I better off putting my money in crypto than in stocks right now?

This certainly is an uncertain time. The market has taken multiple sharp plunges in recent weeks, and that has some investors running scared. We face an uncertain future in the United States and beyond, as public health concerns and policy problems loom. Should you be frightened, or should you invest? And if you do invest, what should you invest in?

First, a word to the wise: Over the long term, the market tends to grow in value. That's a cold comfort to short-term speculators and those near retirement right now, because it may take some time before the market is back to its old self. But if you're someone who is decades away from retirement, this should be an encouraging thing to hear. If you invest steadily for retirement, then you should generally see your investments appreciate. Despite the occasional dip, the overall picture will be a good one, and compound interest will help you build a nice nest egg. In fact, buying into the market now could be a chance to get stocks while they're undervalued.

There's more to the market than stocks, of course. There are precious metals as well as cryptocurrency. Are these wise investments? The answer may depend on your goals. Some investments are traditionally considered less vulnerable to recessions, but the data on that is mixed. It's better to look at such investments based on their own merits. Gold is a relatively stable investment, as is silver — though neither is likely to make you rich anytime soon. Cryptocurrency, on the other hand, is a quick way to make (or lose) a lot of money. Cryptocurrency traders are not simply saving for retirement; they often make real-time decisions and day trade. Dollar by dollar (or byte by byte), they speculate on the future of blockchain-based currencies like Bitcoin.

This isn't simple stuff. Crypto pros keep an eye on sites like CryptoVantage, where they can keep up with cryptocurrency values, volatility, and crypto market news. Just like a stock shareholder or someone involved in real estate matters, these traders accept risks in exchange for the chance to make big bucks. The crypto market is a tricky one, but it has huge upsides for those who can navigate it properly. In other words, this is not a good place for your retirement fund, but it could be a place for you to play around with money you can afford to lose; perhaps you'll strike it rich!

What about gold, silver, and gems? Precious metals and gems are often called recession-proof, but the market hasn't always borne that out. Our advice: If you want to enjoy gems for their own sake, do so, but you shouldn't necessarily view them as an investment. Philanthropist Howard Fensterman is among the prominent figures with a healthy interest in gems. But Fensterman's love of gems is a hobby, not a financial plan: He earned his fortune as an attorney, winning victories in multiple high-profile lawsuits. You are probably not going to make philanthropist-type money swapping gems and precious metals. Besides, a typical gemstone isn't even worth that much (some gemstones are plenty affordable, even for the non-philanthropist set).

Ultimately, it's up to you — and we certainly cannot offer you specific financial advice. All we can tell you is that markets tend to go up over the long term, and that some investments are riskier than others. Find a trading platform that you can trust and start saving for retirement, then consider your options for the cash that you aren't putting away for the long term. Perhaps you'll decide to play the cryptocurrency market, perhaps not. In the end, it's your money.

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