Questioning the Intrinsic Value of Bitcoin and Gold
Howard Marks, co-founder of Oaktree Capital Management, has raised doubts about the intrinsic value of Bitcoin and gold, suggesting that high-yield bond funds may offer a more secure investment option. Speaking on the Merryn Talks Money podcast, Marks, whose firm specializes in distressed debt and manages around $180 billion, acknowledged the historical reliability of gold but questioned its fundamental justification.
A Shift in the Investment Climate
Marks also discussed the current investment climate and noted a significant shift. He believes that the era of 0% interest rates is likely over and advises investors to explore alternatives such as high-yield bond funds. According to Marks, these funds not only offer considerable returns but are also inherently safer due to the nature of fixed-income securities. This cautious approach towards speculative assets like Bitcoin and gold suggests a preference for more traditional investment strategies.
Bitcoin ETFs vs Gold ETFs
In terms of behavior in the market, Bitcoin ETFs and gold ETFs differ significantly. Bitcoin ETFs are relatively new and can experience significant price changes due to regulations or events in the Bitcoin world, such as the upcoming Bitcoin halving. On the other hand, gold ETFs have been more stable. In 2023, the GLD ETF saw a surge of nearly 13%, indicating growing stability. While both Bitcoin and gold ETFs are important in their respective markets, they differ in terms of risk and how they react to market changes.
Hot Take: Choosing Between Bitcoin, Gold, and High-Yield Bond Funds
If you’re considering where to invest your money, Howard Marks’ skepticism about the intrinsic value of Bitcoin and gold may make you reconsider these assets. While they have their merits, high-yield bond funds offer considerable returns and are considered safer due to the nature of fixed-income securities. The investment climate is shifting, and with the era of 0% interest rates likely over, exploring alternative options becomes crucial. So, before jumping on the Bitcoin or gold bandwagon, it might be wise to consider high-yield bond funds as a more secure investment choice.
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