Crypto-currency Bitcoin may be climbing again but I’d much rather build my wealth by investing in a balanced portfolio of UK shares.
I say that even though the fastest money I have ever made came from Bitcoin. I bought a couple of virtual coins for around $600 in 2016 then watched them rocket to almost $20,000 in December 2017. After the subsequent crash I sold one for around $7,000.
I still hold one remaining Bitcoin just in case crypto flies to the moon once more, but I don’t give it much thought. The price has jumped 15% in a week to more than US$22,381 at time of writing, but I’m not getting worked up about it. I have found that building a balanced portfolio of UK shares is way more rewarding.
I’d buy UK shares before crypto
When I buy a share or fund, I am investing in real companies offering real goods and services in the real world. Last time I dabbled in crypto, I felt like I was being intellectually dishonest, because I don’t believe it.
I still don’t get the user end case, or how it can justify all the hype and excitement. If someone could tell me how crypto has made anybody’s life easier or more rewarding, I’d be fascinated to hear it. I bought Bitcoin and Ethereum for the main reason most investors buy them, out of sheer speculation.
With UK shares, it’s easy to see the point. Glaxo manufactures drugs for poorly people. Aviva sells pensions and protection. National Grid helps keep the lights on. Persimmon builds homes that people live in. That’s real homes, made from bricks and mortar, not virtual ones.
BP fuels cars, SSE produces energy, Rio Tinto digs up metals that have a thousand applications. Dogecoin does what, exactly?
Another good thing about buying UK shares is that once I have bought them, I can by and large forget them. I rarely check my portfolio these days, even when markets are crashing or soaring. I just leave it to get on with the job.
I won’t buy Bitcoin again
All my dividend are automatically reinvested for growth. This means I am regularly buying more stock by doing… nothing at all. That’s the way I like it. What I don’t like doing is spending half my day staring at some online trading forum, fretting over where Bitcoin will go next (which was usually in the wrong direction).
I accept that some UK shares could lose me money. One or two companies might go out of business. Even those that do well are unlikely to rocket to the stars in the same way crypto can. But I trust in them to build my wealth over time. Slowly, steadily, and with a minimum of hype. In complete contrast to Bitcoin.