Whether you are skeptical, cautious, and apathetic, OR enraptured, excited and intrigued by it, crypto has exploded in global popularity over just the past year, and has, to one degree or another, captured the attention of most of the civilized world.
Many Westerners find it difficult to understand how a 12-year-old digital currency could be safer to hold than the US dollar, which has long been recognized as the reserve currency of the world. However, once you understand that the Federal Reserve, America’s central bank, has inflated the money supply to achieve its macroeconomic goals, it becomes a bit clearer. Note the “infamous” comment made by Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, in a March 22, 2020 interview on CBS’ 60 Minutes:
Do we have your attention now?
Rather than opine on the intrinsic details and inner-workings of crypto, it is important for most investors to note three main takeaways:
Cryptocurrency is a digital, or virtual, asset. Many cryptocurrencies are decentralized and aspire to be a form of money and a medium of exchange
Unlike fiat currencies, most cryptocurrencies operate without government oversight or intervention
Most cryptocurrencies are managed by a large group of network participants, and are secured by advanced cryptography. Explaining the Crypto in Cryptocurrency does an excellent job of explaining cryptography further
More than a quarter (26%, to be exact) of financial advisors plan to increase their use or recommendation of cryptocurrencies over the next 12 months
Almost half (49%, to be exact) of advisors indicated that clients had asked them about investing in cryptocurrencies over the past six months
Do these two facts alone make crypto “good” or “appropriate” for integration into one’s investment portfolio? Certainly not, but it does speak to the inflection (some may say tipping) point where we find ourselves. El Salvador is pushing to become the first country to adopt bitcoin as legal tender. This feels more like a movement than a trend.
As a brief crypto aside/FYI, the term HODL (hold on for dear life) was coined (yes, pun intended) by a user in an internet bitcoin forum who misspelled “hold,” and now refers to a devout buy-and-hold crypto philosophy. Now you know!
Perhaps next month, Trending Today (TT) should pivot from cryptocurrency and cover NFTs (non-fungible tokens)? Is your head spinning and ready to explode yet? While we are joking about NFTs being the next TT topic, we cite them in light of our dialogue above about cryptocurrency, as NFTs are just another specific example of how quickly our world (both inside and outside the world of finance and investing) is changing. Are these immature assets with room for development? We would argue yes. However, we also argue for (read: encourage) you to be careful about dismissing new technologies too quickly, and to be scrutinous yet open-minded about the speed at which our society is evolving.
Aside #2: If you have three minutes, click HERE to watch an extremely funny (and surprisingly educational) Saturday Night Live skit about NFTs.
Crypto – Join Us for Our Cryptocurrency Webinar!
Bitcoin and Ethereum are two of the most popular of the more than 4,000 different cryptocurrencies in existence as of January 2021. Crypto has exploded in popularity over the past year, and has emerged not only as a new asset class, but also as an alternative store of value – some call it “digital gold.”
Click below to RSVP for this 45-minute educational Zoom webinar, in which Christopher King, CEO and Founder of Eaglebrook Advisors, will discuss the question: “Bitcoin – what is it?” as well as how cryptocurrencies and digital currencies can play an important complementary role within a properly diversified investment portfolio. Wednesday, June 23 12:00PM – 12:45PM PST Click HERE to RSVP
For every participating attendee, we will make a $10 donation to the Leukemia and Lymphoma Society – please invite a friend, colleague, or family member to also RSVP with this link!
What’s Happening at TPW?
As a work family, part of the Towerpoint Wealth culture is to regularly volunteer and find opportunities to give back to our community. Earlier this week, in conjunction with the Cathedral of the Blessed Sacrament and with the help of Marilynn Fairgood, the Cathedral’s Brown Bag Lunch program coordinator, we had an opportunity to assemble, and then distribute, sack lunches and other supplies to assist Sacramento’s homeless community.
Unquestionably this was a fulfilling experience for everyone involved, as the sincere gratitude and appreciation we received was both heartwarming and priceless.
Click HERE for an excellent article from KHOU-11 for additional information on how to help and volunteer for the Brown Bag Lunch program.
Chart of the Week – Crypto, Bitcoin
In our opinion, the most effective way to reduce and manage the risk of a properly diversified portfolio is to own various assets and investments with low correlations to each other. Understanding that no one can accurately predict the future performance of any investment, owning low (or even negatively) correlated assets can help mitigate damage during any particular market cycle.
Below is a simple chart (specifically, the darker blue dotted rectangle) that delineates the correlation between Bitcoin and the S&P 500 – at 0.19, this is an attractively low correlation. Put differently, Bitcoin oftentimes zigs when the stock market zags.
Trending Today – Sacramento Financial News
In addition to technology’s permeation into finance, a number of trending and notable events have occurred over the past few weeks:
As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, firstname.lastname@example.org) with any questions, concerns, or needs you may have. The world continues to be an extremely unsettled and complicated place, and we are here to help you properly plan for and make sense of it.
Part of the Towerpoint Wealth culture is to regularly volunteer as a work family and find opportunities to give back to our community.
Yesterday, in conjunction with the Cathedral of the Blessed Sacramento and with the help of Marilynn Fairgood, the Brown Bag Lunch program coordinator, we had an opportunity to assemble, and then distribute, sack lunches and other supplies to assist Sacramento’s homeless community. Unquestionably this was a fulfilling experience for everyone involved, as the sincere gratitude and appreciation we received was priceless.
Click HERE to read an excellent article from KHOU-11 for additional information on the Brown Bag Lunch program, and how to help and volunteer.
With a heavy heart almost three years ago, we recognized the vicious wildfires tearing through both Napa and Santa Rosa when we published Trending Today on October 13, 2017. Today, with massive wildfires burning throughout Napa, Sonoma, Lake, Solano, and Yolo counties, we feel compelled to do so again.
As we mentioned in that newsletter, fortunately tough times do not last, but tough people do. And as dedicated and tireless relief and rescue crews work to contain and extinguish these devastating fires, we look to a rare bright spot during this time of destruction, symbolizing resilience, literally from the ground up as it rises from the ashes – the California fire poppy.
All of this begs the question – what can we do to help? The answer – stand with us and please give if you are able.
Towerpoint Wealth is committed to directly helping those in need during these fires, and we are pleased to offer a 100% match, up to a total of $15,000, of any charitable donations made by you to any of the following three fire-relief organizations:
California Wildfire Relief Fund
Solano Disaster Relief Fund
2020 Napa County Wildfires Fund
Please simply email us your donation receipt at email@example.com, and we will promptly email you our matching donation receipt within 48 hours.
* IMPORTANT NOTE: Please also remember that the recently-passed CARES Act created a one-year tax-deductible charitable deduction of $300 for the 90% of taxpayers who claim the standard deduction in 2020!
Matt specializes in working with attorneys, helping them manage the unique aspects of proper coordination all of their financial affairs. We look forward to having him utilize his tax consulting and wealth management skills and experience to help his own and other clients of Towerpoint Wealth save money on their income taxes, manage the downside risk of their portfolios, and properly plan for a comfortable retirement.
Please click HERE to read more about Matt, and please reach out (firstname.lastname@example.org, 916-405-9164) to say hello, congratulate him, and help us with a warm “welcome aboard!”
TPW Service Highlight – Customized Responsible ESG Investing
Are you aware you are able to align your portfolio with your personal values, without compromising your ability to have a diversified portfolio positioned to earn competitive returns? Many investors are not. Responsible investing, also known as ESG investing (Environmental, Social, and Governance) has exploded in popularity and importance over the past ten years (see the GraphoftheWeek below), and has quickly become an area of specialization at Towerpoint Wealth.
Screening to either avoid or advance ownership of specific companies, based on a myriad of different sustainability issues and criteria, is a central objective of ESG investing:
Environmental issues range from climate change, clean water, animal welfare, and deforestation. Social issues can include racial justice, education, poverty, democracy, and women’s rights. Governance issues encompass worker treatment, corporate ethics, and corporate diversity and inclusion. Click the Ethic Sustainability Pillarsstory found below for a deeper understanding of the various ESG issues that Towerpoint Wealth can specifically screen for, to help you avoid or advance your investment in equities consistent with these issues.
Time to do an ESG “healthcheck” on your portfolio? We welcome an invitation to sit side-by-side with you to conduct a deep-dive sustainability analysis of your portfolio, where we will x-ray your investments to evaluate what is considered “clean,” what is considered “dirty,” and how to make intelligent and tax-efficient ESG improvements. Click HERE to find out more, or click on our What’s In a Name? A Guide to Responsible Investingeducational white paper found below.
As always, we sincerely value our relationships and partnerships with each of you, as well as your trust and confidence in us here at Towerpoint Wealth. We encourage you to reach out to us at any time (916-405-9140, email@example.com) with any questions, concerns, or needs you may have. The world continues to be an extremely complicated place, and we are here to help you properly plan for and make sense of it.