Get ASX Price
LATEST FINANCIAL PLANNING NEWS
Hot Issues
Federal Budget 2018 – Overview
Your Budget
4 components of our 2018 Federal Budget
US China trade war fears – Q & A
Tools to help you manage your financial position are available on our site.
7 ways to boost your super
Australians reveal their priority goals
Australia by numbers – Update
Your retirement questions answered
How to make money by turning your unwanted goods into cash
Our website is really our digital office.
Bitcoin – is it really for you?
Spread your money, reduce risk
Love and money? It’s not about control
The pullback in shares - seven reasons not to be too concerned
Australia. All you need to know to be the expert.
Australian’s love affair with debt - how big is the risk?
5 ways to keep a cool head in a falling share market
2018 – a list of lists regarding the macro investment outlook
Sports lovers enjoy better financial fitness
Where Australia is at. Our leading indicators.
The year that was and the year ahead
Add some extra cash to your New Year
New year, new financial resolutions
Our Advent calendar for 2017
Where are we in the global investment cycle?
Australia's vital statistics
12 ways to enjoy summer without spending a fortune
One in three Aussies travel without protection
Digital payment options could see you spend more this Christmas
If you’ve always thought property prices only go up…
Will Australian house prices crash?
Where are we in the global investment cycle and what's the risk of a 1987 style crash?
Money steps for women
Resources on our site to help you, your family and your friends.
Australian Dietary Guidelines and healthy eating chart (PDF)
How to retire, your way
Prepare for retirement without missing out today
Be the boss of your cash
The Australian economy bounces back again
Should you lend money to family?
Money mistakes people make in their 50s and 60s
Australian Dietary Guidelines and healthy eating chart (PDF)
Eight steps to improved cashflow... and lifestyle
Powerful Budgeting, cash flow and Super Tools available on our site.
5 ways Australians will use their tax return this year
Australia's leading causes of death - ABS
The threat of war with North Korea
Six traits of Australians living the dream
The break higher in the Australian dollar is likely to be limited
Money can buy you happiness, you’re just spending it wrong
Key Economic Indicators, 2017 – updated
Helping your kids buy a home
From Goldilocks to taper tantrum 2.0
What’s your debt age?
Doing a budget is a good idea but ....
Planning is the key to making it financially
What to do when you come into money
Managing your money when you move in together
Reduce your bills with these household items
It pays to contribute to your partner's super
How to cope with losing independence
Transition to retirement income streams
The Australian economy hits another rough patch
Watch out for tax scams
The three core pillars of this year's budget
Federal Budget - 2017-18 - Overview
Federal Budget - 2017-18 - Budget documents
Make the most of the current super caps
Five, four, three… it’s not too late to get more in super
Super changes are coming
What’s your debt age?
Australian cash rate on hold
Super changes this financial year - Dr Shane Oliver - video
The door is closing on super’s current caps
Is Donald Trump's honeymoon with investors over?
Estate planning and why you need a super plan
What does a comfortable retirement look like?
Give your career a health check
Super changes from July 2017
Changes to the Age Pension assets test
Keep your money safe over the silly season
Looking ahead at 2017
Review of 2016, outlook for 2017 - looking better despite the political noise
Merry Christmas for 2016, a Happy New Year and a prosperous 2017.
54.2 million worries
Five tips for happy healthy ageing
Thinking about managing your own super?
Sending more to the tax office than you should?
Government pulls back on proposed changes to super
Market Update - What to consider when investing in a low return world
Stop!! Don't do a paper Budget, use our online budgeting tools instead.
Oliver's Insight - Megatrends
Value of Advice
A growing family doesn't have to blow the budget
Blinded by optimism
Thinking about managing your own super?
The investment outlook - it's not all that bad!
What’s your biggest obstacle to financial success?
Ageing Parents
Should you own the roof over your head?
Be a senior entrepreneur on your own terms!
Brexit and other key developments
Brexit wins
Commentary on major issues - AMP
Five money habits for a happy financial year
Remember to factor in parental subsidies at tax time
Are grandparents giving too much?
2016-17 Federal Budget - AMP
2016 Budget in detail
How (and why) to talk to your adult children about insurance
Procrastination: Just do it. Eventually.
Why Australian property won't collapse
The Lucky Country holding up pretty well
Have we reached the bottom?
The evolution of the Chinese consumer
Retirement rolls around faster than you think
Pressed for time?
Changes to the Age Pension assets test
Women are building financial intelligence
Heirlooms no more
Initial market falls precede stronger returns - Shane Oliver
What exactly is income protection insurance and do I need it?
A rough start to the year, which could have further to go
Aged Care - Changes to Assessment of Rental Income
A bump in the road, then a new start
New year, new start – are you ready for retirement?
Review of 2015, outlook for 2016 - Dr Shane Oliver
We wish you a Merry Christmas for 2015 and a Happy New Year
Go easy on the plastic over Christmas
Resolutions for a wealthy future
The Australian dollar doing what it normally does - overshoot. Dr Shane Oliver
How to manage volatility in a low return world
The Australian economy - more help will be needed. Dr Shane Oliver
Insurance through my super
Four tactics to build an investment portfolio
The demand for global infrastructure
Help achieve your investment goals with dynamic asset allocation
The Power of Budgeting
Jump retirement hurdles with a coach
Preparing for the time of your life
A Super Loan for all reasons
Making a smooth transition
Budget 2015 - some professional opinions
Australian Government - Budget 2015
Achieving a comfortable retirement
Is off-the-plan on the money?
Should I take my super as a lump sum or not?
Do you have a key person in your business?
Tips for success in a competitive job market
All you need to know about buying at auction
To sell or not to sell?
Saving in a material world
Bitcoin – is it really for you?

If I could sum up the contents of my junk emails over the last 12 months in a single word it would be: Bitcoin.



       


 


I can’t tell you how many unsolicited invitations I’ve received to start trading bitcoin – you may have experienced the same thing. This alone is a concern but when heavy hitters like the International Monetary Fund (IMF) start calling out the risks of bitcoin, the warning bells should definitely start ringing.


By way of background, bitcoin is one of many “cryptocurrencies” or digital currencies that aren’t backed by governments or banks. Instead it relies on a decentralised peer-to-peer network called a blockchain – a vast digital ledger that uses complicated calculations to record all transactions made using bitcoin.


The technical details are complex. What’s much easier to grasp is the meteoric rise of bitcoin.


Big gains means big risks


For many years you could buy bitcoin for the price of a restaurant meal. Then in 2016 it started to take off. By mid-December 2017 bitcoin had soared in value to $AUD25,410. And that’s where things headed south. In mid-January 2018 bitcoin’s value had tanked to $AUD12,893. 

As so often happens in speculative markets, some people have made big money. But plenty of latecomers would have experienced dreadful losses. 


Security concerns


Hindsight is always a wonderful thing. But one of the fundamental rules of investing is that big returns come with big risks. Another maxim for successful investing is to only invest in something you understand, and it’s a reasonable bet plenty of people don’t fully grasp how cryptocurrencies work. 

The problem is, crooks do. A report by the University of Cambridge notes that 22% of bitcoin exchanges have experienced security breaches. The same report says less than half the cryptocurrency payment companies in the Asia-Pacific, Europe and Latin America hold a government license. 

It’s hardly reassuring stuff. And just recently the IMF warned that cryptocurrencies can “post considerable risks as potential vehicles for money laundering, terrorist financing, tax evasion and fraud”. 

Yet despite all this, investors are still pouring money in, hoping to ride a second wave of gains. 


Is bitcoin a good investment?


History is littered with the fallout from speculative markets, and the pattern is often similar – a steep rise in value fueled by investors coming on board late in the cycle for fear of missing out. 

For my money, a good investment is backed by a quality asset – like shares in a successful company, a well-located investment property, or units in a managed fund run by a reputable team. There are plenty of such investments to choose from, and as your adviser I can help you narrow down the choice of what’s right for you. 

As it stands, cryptocurrencies are largely unregulated, and without the backing of an underlying asset there is no real reason why their value should continue to rise other than demand from over-exuberant investors. If you do plan to invest in bitcoin, my advice is to only tip in money you can afford to lose. 

If you’d like to invest in proven assets with a track record of ongoing returns and long term capital gains, backed by best of breed research, contact us for professional advice on a portfolio tailored to your goals. 




By Paul Clitheroe AM 
Paul Clitheroe AM, co-founder and Executive Director of ipac securities limited, Chairman of the Australian Government Financial Literacy Board and Chief Commentator for Money magazine. 
 


First published January 2018


 


 


Hawthorn Financial Planning Pty Ltd ABN 47 011 910 918
Corporate Authorised Representative
Charter Financial Planning Limited ABN 35 002 976 294
Australian Financial Services Licensee Licence number 234665
Registered address Level 24, 33 Alfred Street Sydney NSW 2000
Legal Disclaimer | Privacy Policy



Hawthorn Financial Planning 67 King William Road UNLEY SA 5061 Ph: (08) 8339 7973

IMPORTANT INFORMATION | Site By PlannerWeb