The Holy Grail of the investor is the so-called “safe investment.” This is the hidden gem that keeps the emotions of an investor consistently positive while maintaining a consistent rate of return. Oh yes – this investment must also require absolutely no research into its underlying company.
Even the best investors in the world are still looking for this kind of investment. The only people who seem to get close are professionals like Warren Buffett and Peter Lynch, and they spend all day researching the companies they choose. As a matter of fact, they have other full-time employees researching those companies as well.
Any investor who is looking for a safe investment should simply hold money in a savings account. There is a downside to this kind of investment – it does not outpace inflation. Anything with a potential for profit also brings with it some amount of risk. Here are just a few of the “safe investments” of today and how they really weren’t all that safe before they became famous and overwhelmingly profitable.
• Amazon, which recently earned the title of “world’s biggest retailer,” spent 10 years losing profits. Around 2010, story after story listed it as an eventual failure and wondered why people kept pouring money into it. Today, Amazon is considered one of the safest investments you can make.
• Facebook was considered a no-brainer when it had its IPO a few years ago. People who thought they could only benefit from it bought heavy during the first day of public trading. In the first week after that day, Facebook lost almost 50% of its value. Although it has more than made up for that now, the people who thought that it was safe to get in quickly suffered a huge loss.
• Walmart was considered one of the safest investments of the past century – a giant that could never be taken down. Many people based their entire retirement portfolios on Walmart stock. However, the advent of digital retailing has caused Walmart to look a bit shaky. People who invested too much in the company are now losing money.
When you look at the performance of the world’s biggest and most successful companies, you cannot always classify it as safe. Ergo, bitcoin will probably never be a completely safe investment, either. The real question that you should be asking is if bitcoin is a good investment. Good investments have a totally different feature set from safe investments, and many of those features depend on your active participation in the market.