You could soon be able to invest your 401k retirement savings into cryptocurrency, private equity, and real estate. Now, most 401k plans have several investment options that include publicly traded stocks and bonds. Now, a new executive order signed by President Trump directs the SEC, Treasury, and Labor Department to update their rules to give investors access to those new options. Let’s bring in ABC News contributor and Sirius XM radio host Mike Muse for the Mike and Ike hour. Mike, what’s going on?
Always a pleasure to talk to you. Now, I want to start big picture here.
All right. So, for people who don’t know much about crypto but might be interested, why is crypto becoming such a big market investment option? the the news uh this week was really special because we’re going from a place where crypto has been strongly regulated um within the federal government to the federal government taking a different approach from going from regulation to actual rulemaking which suggests to investors uh that this is now a good time to do more deep dives into crypto and to be willing to do more investments within the crypto space because it’s creating more certainty in the market because of the fact that the federal government is loosening its position by two ways.
We saw the White House release 160 page blueprint plan of how the federal government and recommendations should be looking at crypto as well as we saw the SEC do project crypto which again is removing some of the regulatory spaces of crypto into and to rulem lending its way to creating more innovation in the marketplace for crypto. So all good signs towards more openness for investment.
Now Mike, some investors encourage a mix of stocks and bonds to diversify your 401k. Is there a benefit to picking a variety of investments? Now thinking about cryptocurrency.
Yeah. So if you take everything that I just said when you think about your traditional 401k and portfolio, it’s always good to talk to do stability um with risk, right? And so but you have to think about crypto and digital assets are extremely risky uh but also too has a high value of riskreward. uh when you’re going into the space, you want to think about moving slow and small and particularly if you’re new to the space because of the fact that it is so volatile of the marketplace. So if you really start small with crypto and if something happens and it it it crashes or goes low, it doesn’t impact uh your portfolio.
But if it does have upsides and upswings, it’s only positive advantage.
So really want to think about going slow and going small and still think as it as an emerging technology asset. Now Mike there is other well there are other parts of this obviously private equity and real estate. Now private equity firms they can charge high fees and lock investors in for long periods of time. So what are the advantages and disadvantages of investing in either private equity or real estate?
Great question. So we have to look at into like three different types of categories of investors.
Uh when you think about crypto crypto investments and digital assets investments is really for that investor that has more money to play with for the long term. Uh if you look at private equity, private equity investments is usually for wealthy investors and institutional investors who are able to hold on to their investments and assets and securities for the longer time period. When you look at real estate investments, those who typically invest in real estates are looking for more stability in their investments and their assets.
But I keep in mind that real estate still is a marketplace asset and so it still could fluctuate based upon the market and then also too based upon interest rates. So those are the three different ways that you should be thinking about as you look at those three different types of investments. More riskier, more reward you may have long term to play with it. Um private equity definitely more wealthy investors long term and real estate is more stability in the marketplace.
All right, Mike and quickly give me some advice here.
Where should someone start when researching cryptocurrencies? Where do I begin? Uh the best thing that I always suggest to my listeners is to always contact trusted financial advisors. That’s number one. contact your local retail brand to for advice and also to do as much work as you can within the internet and really start to look at now on the SEC websites because now you can understand some of the policies that are coming forward and some of the regulations but now is the time to really tune in because of uh the federal government is taking more of a favorable approach uh uh to embracing digital currency.
All right, Mike Muse, thank you very much as.
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