Bubbles and Overvaluations??

We were all so happy to get out of 2020, we didn't realize that we stepped out of one crazy cab and into a train wreck!  Can't we have a slow news cycle for 1 month?

With a strong stock market that threw many for surprise in 2020, we think people are underestimating the return potential in 2021.  Look how bad the news cycle has been on a political front, botched vaccine roll out, increases in lock down measures, and so on, yet the market shrugs it all off.  In fact, technology, small cap stocks, and emerging market stocks had a great start to the year (coincidentally our tactical investments).

We now hear a lot of concern over bubbles and valuation.  We appreciate these concerns, and using traditional metrics, it is hard not to have that concern.

However, as we discussed in our webinar, we live in a digital age, and we are just entering a phase of exploring the real potential to what that means.

In particular, we would point to a few things that are difficult to measure in a digital age and with significant innovation:

1) inflation:  the impact is lower prices, but not because of lower demand.  As we use resources more intelligently, become more informed and smarter consumers (both individuals and corporations), and find better and cheaper ways to solve problems, prices go down.

2) GDP: usually measured by consumption, GDP goes lower if prices go lower.  If we consume the same amount year over year, but buy it at a 10% discount, then gdp would fall 10%.  GDP is still measured using industrial age metrics, but in the age of innovation and digital solutions, some aspects of economic growth and prosperity may go undetected.

Overall, there are a lot of things on motion today, and with a strong economic backdrop, enthusiasm over fiscal and monetary policy, and record earnings, we think it is best to remain focused on well thought out goals and objectives and to not get caught up in GameStop excitement.

Innovation, Tech, 2021 and your Money...even when the power goes out

The innovation fast forward button was pushed during Covid and we are in a position to capitalize....but how?

The Bitcoin Craze!!

Bitcoin and other cryptocurrencies have been all the rage and have come back into the spotlight after a steep increase in value, edging close to $20k per coin for the first time since 2017.  The blockchain technology that it is based on is been said to be almost unhackable, but storage on the wallet used can be hacked (see more about Wallets later in the overview). With Bitcoin and other Cryptocurrencies trading at these highs, we thought it would be helpful to give a quick reference guide to help people navigate some of the questions that might arise in potential investor and users’ minds.

What is Cryptocurrency?

Simply stated: a new form of digital money that is decentralized.  The foundation of cryptocurrencies is a new technology called blockchain.  Blockchain is an online public ledger that is used to track transactions.

Below are a few good documentaries on the rise of cryptocurrency.

Learn more about blockchain:


 What is the hype behind crypto currency? 

This digital asset class has caught some steam by being accepted by some major institutions and high net worth and high-profile individuals.  This recognition has legitimatized the currency more than ever.

 Why own Bitcoin or any other crypto currency?

What is the Value of Bitcoin?

Bitcoin is based on Supply and demand.  Unlike fiat money or precious metals, it is not backed by the faith of any government or the tangible metal itself.  Because of that it really has no underlying “worth” other than its use and the supply and demand of the currency.

Crypto Wallets:  wallets don’t hold money like we think of as a conventional wallet.  Instead, it holds a record of transactions.  You don’t have to choose one.  Hard wallets are considered better for larger holdings because they are more secure, while software and web-based wallets might be more convenient for frequent transactions.

Below are some helpful articles that go into detail on the different types of wallets and options.

Crypto Currency Tax Implications: 

Some helpful articles to reference.

 Crypto News Websites:  Below are a few good websites for news on crypto currencies.

 Best charting websites and tools: Similar to stocks, many cryptocurrency traders use charts to make more informed decisions.  Below are some possible options to explore to help with that.  Tradingview  is comprehensive and also covers traditional assets like stocks.

Info on Exchanges: There are many cryptocurrency exchanges.  Some of the key things to look for when choosing a platform may include:

The following articles are really helpful to find the right exchange for you.  We recommend researching this topic thoroughly before making the plunge.

We hope you found this information helpful as you learn more about cryptocurrency or consider getting involved.  We don’t engage in cryptocurrency directly, but feel it is important for us to be educated on the matter and be a resource for our clients on thinking through whether it might be appropriate.

Please reach out with any questions to info@grwealthplan.com.

Thanks to Sebastian Varela for his help in putting together this article!  Great work!