a good idea to pay pensions?
I got a message from Jo Cumbo for my comment on the use of Crypto as an investment to fund pensions yesterday. I couldn’t comment, because I don’t have the capacity to get to terms with it and because there are better things to trouble my brain about. But Jo is asking the right questions and talking to a consultancy (Cartwright) who have promoted Bitcoin to their client who has done very nice by this investment year one.
I see 50 odd responses to Jo’s question, this is a very contentious subject for investment consultants, fund managers and others cleverer than me.
My answer to Jo was for her to speak to Ian McKnight who I see has commented. He is someone who consistently talks above my pay-grade with me, as if I was half as brainy as he was and is always will be!
But the test I use for trustee investments is that trustees must be able to explain to members
- What the investment is in to and what difference the investment will make
- What good their money do in making their lives more sustainably worthwhile
- How much return can be expected and what the risks of that not happening are
I was taught this by Tony Filbin who is my touchstone in all this
I am afraid I am not in a position to answer the questions for Bitcoin or for any form of crypto currency. So long as I can’t I cannot support the use of it in pensions (mine or other people’s).
I can however get to grips with the use of the blockchain to manage investment administration and have been arguing on this blog the case for tokenisation. There is some cross-over between my thinking and those who manage crypto on Distributed ledger technology (DLT).
I do not find a high return on an investment over 12 months a sufficient argument for investment, I find comprehensible answers to the questions above compelling. If no answer is forthcoming as to what justifies Bitcoin being 56% higher in value than this time this year, I will put it in the same drawer as reports that the horse which one a Grade 1 at Goodwood this year at 120-1. It is a drawer which reminds me that unexplained wins are not going to repeat with any certainty!
The ball is with Sam Roberts of Cartwright to get to my grey matter (much depleted) if I am to want investments in crypto (even Bitcoin which Iain McKnight tells me is the best of that lot).
There is of course opportunity cost in making such investments. If no proper answers are forthcoming and you go ahead, you have to count the cost opportunity of ignoring worthwhile investments you have not made but wanted to. I know such investments exist and am prepared to share them on this blog as “good ideas” , “worth of due diligence” and “not tips” or “advice”.