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Why  –  and how  – crypto should be in your balanced portfolio

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Why — and how — crypto should be in your balanced portfolio

Rodrigo Marques, CEO of Atlas Quantum

We have a simple mission at Atlas Quantum: to help the world build wealth through cryptocurrencies. We believe that the strategies usually reserved for wealthy individuals and large institutional investors should be available to everyone. That’s why we built a platform that combines the power of smart algorithms, sophisticated trading strategies and the decentralized nature of new digital currencies like Bitcoin.

Of course, it can be daunting for any new investor to get started — especially when it comes to a new asset class like cryptocurrencies. We’ve spent a lot of time early on, educating people on the market and the technology behind it. But one question we’re often asked by those new to crypto is: what role should these assets be playing in a balanced portfolio?

It’s an important question — so to answer it best, let’s break it down to the key component parts.

Why crypto?

There are plenty of reasons to choose crypto, from the transparent and democratic nature of crypto, to the important role crypto could play in truly democratizing the financial markets globally. And of course, chances are at least one of your friends has talked about investing in the space.

But perhaps most importantly, it’s now rapidly gaining mainstream acceptance as an asset class. We spoke to Bitcoinist just last month about how significant regulatory ‘u-turns’ in a number of regions suggests that mainstream acceptance for crypto is not far away. And of course, cryptocurrencies are no standard asset class — so they’ll bring new opportunities for all sorts of investor types.

Finding balance and playing the long game

That word ‘balance’ is key. For even the most conservative, passive investor, there’s a lot to be said for the role of cryptocurrencies in your portfolio. While opinions still vary, sentiment does increasingly suggest that the crypto asset class is a positive ‘bull market’ in the long term, with valuations likely to increase as regulatory clarity improves and institutional investors get involved.

Whether you’re new to investing or not, the importance of diversification is unsurprising and easy to grasp. It’s a simple but effective way to lower the risks of investing, ensuring your profits — or losses — are never tied to one single type of asset or strategy. A diversified portfolio is a stable portfolio. And of course, for those specializing in cryptocurrencies, diversification can be applied within an asset class, too. As CoinCentral outlined recently, crypto specialist investors could consider investing across crypto assets with large, medium and smaller market caps, in order to build a diversified crypto portfolio.

What does that mean for you? Whatever type of portfolio you’re building, there’s a role for crypto to play. Even if you intend to take the long-term ‘buy and hold’ approach with a traditional investment portfolio, a modest holding of cryptocurrencies might be worth considering.

Volatility and opportunity

Clearly there’s a role for cryptocurrencies to play in a passive investing strategy. But when you combine the conditions of the crypto market, with the sophistication of other classic trading strategies, things get really interesting.

That’s where a platform like Atlas Quantum comes in. Because while Bitcoin is bought and sold at various digital brokerages around the world, a range of differing market conditions mean that the price is often cheaper or more expensive in one market, compared with another. When you deploy a smart algorithm to continuously monitor for fluctuations between those exchanges, ready to take advantage of that ‘arbitrage’, you get a perfect storm of old and new financial investing. It’s an approach that’s already working well for our users, with the platform yielding an average monthly profit of 2–3%, in the first two years of operation (and 5.24% back in April).

So when it comes to investing in cryptocurrencies, don’t forget all the tried and tested techniques that can help you get started — and look out for smart ways to take advantage of volatility.

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UK earmarks a further $2.3 billion for its COVID vaccine push

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UK earmarks a further $2.3 billion for its COVID vaccine push 1

LONDON (Reuters) – British finance minister Rishi Sunak will announce an extra 1.65 billion pounds ($2.30 billion) to fund the country’s fast vaccination rollout as part of his annual budget statement on Wednesday, the finance ministry said.

“Protecting ourselves against the virus means we will be able to lift restrictions, reopen our economy and focus our attention on creating jobs and stimulating growth,” Sunak said in a statement.

Britain has so far given a first vaccination more than 20 million people, or more than one in three adults, Europe’s fastest vaccination rollout.

“The new money will continue to vaccinate the population and ensure every adult is offered a dose of a vaccine by July 31,” the ministry said.

A further 33 million pounds will be spent on vaccine testing and development to protect against future outbreaks and variants and 22 million pounds will fund a study to test the effectiveness of combinations of different COVID-19 vaccines.

(Writing by William Schomberg; editing by Philippa Fletcher)

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Wall Street Week Ahead: Investors weigh new stock leadership as broader market wobbles

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Wall Street Week Ahead: Investors weigh new stock leadership as broader market wobbles 2

By Lewis Krauskopf

NEW YORK (Reuters) – A shakeup in stocks accelerated by the past week’s surge in Treasury yields has investors weighing how far a recent leadership rotation in the U.S. equity market can run, and its implications for the broader S&P 500 index.

Moves this week further spurred a shift that has seen months-long outperformance for energy, financial and other shares expected to benefit from an economic recovery, while a climb in Treasury yields weighed on the technology stocks that have led markets higher for years.

The two-track market left the benchmark S&P 500 down for the week, and sparked questions about whether it could sustain gains going forward if the tech and growth stocks that account for the biggest weights in the index struggle.

So far this year, the S&P 500, which gives more influence to stocks with larger market values, is up 1.5%, while a version of the index that weights stocks equally is up 5%.

“That just tells us the gains are less narrow, more companies are participating, and I think that’s healthy,” said James Ragan, director of wealth management research at D.A. Davidson.

The focus on market leadership comes as investors are weighing whether the S&P 500 is due for a significant pullback after a 70% run since March, with the rise in long-dormant yields the latest sign of trouble for equities as it means bonds are more serious investment competition. The yield on the 10-year U.S. Treasury note this week jumped to a one-year peak of 1.6% before pulling back.

Economic improvement will be in focus in the coming weeks, including the monthly U.S. jobs report due next Friday, as will the country’s ability to ensure widespread coronavirus vaccinations, especially as new variants emerge.

Tech and momentum stocks helped drive returns in 2020 “when everyone was locked down and all they had was their computer,” said Jack Ablin, chief investment officer at Cresset Capital Management. “Now it seems with the vaccines, the stimulus and the prospect of reopening that we are looking out toward a recovery phase.”

The shift in the market this week is building on one that was fueled in early November, when Pfizer’s breakthrough COVID-19 vaccine news generated broad bets on an economic rebound in 2021.

Among the moves since that point: the S&P 500 financial and energy sectors are up 29% and 65%, respectively, against a nearly 9% rise for the benchmark index and 7% rise for the tech sector. The Russell 1000 value index has gained 16.5% against a 4.3% climb for its growth counterpart, while the smallcap Russell 2000 is up 34%.

“You definitely are seeing the reopening trade that has pretty much come alive here,” said Gary Bradshaw, portfolio manager of Hodges Capital Management.

Despite the gains, there remains “plenty of room for the reflation trade to run from a valuation perspective,” Lori Calvasina, head of U.S. equity strategy at RBC Capital Markets, said in a report this week. RBC is “overweight” the financials, materials and energy sectors.

Rising rates tend to be favorable for more cyclical sectors, David Lefkowitz, head of Americas equities at UBS Global Wealth Management, said in a note, with financials, energy, industrials and materials showing the strongest positive correlations among sectors with 10-year Treasury yields.

Still, how long the market’s reopening trade lasts remains to be seen. Investors may be reluctant to stray from tech and growth stocks, especially with many of the companies expected to put up strong profits for years.

Any setbacks with the economy or with efforts to quell the coronavirus could revive the stay-at-home stocks that thrived for most of 2020.

And with a GameStop-fueled retail-trading frenzy taking hold this year, banks and other stocks in the reopening trade may fail to draw the same attention from amateur investors as stocks such as Tesla, said Rick Meckler, partner at Cherry Lane Investments.

“There isn’t the pizzazz to those stocks,” Meckler said. “There rarely is a potential for stocks to make the kind of moves that big tech growth stocks have made.”

(Reporting by Lewis Krauskopf; editing by Richard Pullin)

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Exclusive: European officials urge World Bank to exclude fossil-fuel investments

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Exclusive: European officials urge World Bank to exclude fossil-fuel investments 3

By Kate Abnett and Andrea Shalal

WASHINGTON (Reuters) – Senior officials from Europe have urged the World Bank’s management to expand its climate change strategy to exclude investments in oil- and coal-related projects around the world, and gradually phase out investment in natural gas projects, according to three sources familiar with the matter.

In the six-page letter dated Wednesday, World Bank executive directors representing major European shareholder countries and Canada, welcomed moves by the Bank to ensure its lending supports efforts to reduce carbon emissions.

But they urged the Bank – the biggest provider of climate finance to the developing world – to go even further.

“We … think the Bank should now go further and also exclude all coal- and oil-related investments, and further outline a policy on gradually phasing out gas power generation to only invest in gas in exceptional circumstances,” the European officials wrote in the letter, excerpts of which were seen by Reuters.

The officials took note of the World Bank’s $620 million investment in a multibillion-dollar liquified natural gas project in Mozambique approved by the Bank’s board in January, but did not call for its cancellation, one of the sources said.

The World Bank confirmed receipt of the letter but did not disclose all its contents. It noted that the World Bank and its sister organizations had provided $83 billion for climate action over the past five years.

“Many of the initiatives called for in the letter from our shareholders are already planned or in discussion for our draft Climate Change Action Plan for 2021-2025, which management is working to finalize in the coming month,” the Bank told Reuters in an emailed statement.

The Bank’s first climate action plan began in fiscal year 2016.

The United States, the largest shareholder in the World Bank, this month rejoined the 2015 Paris climate accord, and has vowed to move multilateral institutions and U.S. public lending institutions toward “climate-aligned investments and away from high-carbon investments.”

World Bank President David Malpass told finance officials from the Group of 20 economies on Friday that the Bank would make record investments in climate change mitigation and adaptation for a second consecutive year in 2021.

“Inequality, poverty, and climate change will be the defining issues of our age,” Malpass told the officials. “It is time to think big and act big in finding solutions,”

He said it was also launching new reviews to integrate climate into all its country diagnostics and strategies, a step initiated before the letter from the European officials, said one of the sources.

(Reporting by Andrea Shalal in Washington and Kate Abnett in Brussels; Additional reporting by Valerie Volcovici in Washington; Editing by Matthew Lewis)

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