A popular crypto analyst is comparing the returns of a traditional investment class against Bitcoin (BTC) to gauge which was the better play.
In a new strategy session, the anonymous host of InvestAnswers tells his 442,000 YouTube subscribers that Philip Morris tobacco company’s return on investment (ROI) for dividend stocks has been hampered by both taxes and inflation.
“Let’s dig into a dividend stock and show you the danger of dividend stocks with an illustration of Philip Morris over the last five years. Philip Morris is a top blue-chip dividend stock. They sell [cigarettes].
They pay about 4.8% dividend a year, and you’re taxed on that dividend… Look at this stock: it basically fell from $120 over five years ago, down to $100 today… give or take a few bucks. You get no alpha. You get no return from dividend-paying stocks. That was always my thesis, always my point.
And plus, very important to remember, that $120 you invested five years ago has less than $80 dollars in purchasing power today. So $40 of that $120 is gone because of debasement of the currency. It’s still denominated in US dollars, and that’s the problem.”
The host next looks at Bitcoin’s performance over the same timeframe, noting that even after BTC falling dramatically since last November, it remains up by more than 8x.
“Despite the crushing downfall of Bitcoin, [it] is still up 728% over that exact five-year period. Yes, this chart looks really ugly and that line there you’re seeing is the 200-week moving average.
We are under that right now, but even despite that, if you had reversed the clock back to November [2021], those returns would have been over 2,600%, not 728%.
The point is, even just a small allocation of 2% to 5% into things like Bitcoin or Tesla can change the game and change your portfolio. If I fast forward my age a couple of years, if I was 60 would I still hold Tesla? Yes.
Would I still hold Bitcoin? Yes, because I can’t find better risk-rewards out there. It’s that simple. Especially at these prices. Not financial advice.”
At time of writing, Bitcoin is down 1.51% over the last 24 hours, priced at $20,684.
I
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxFeatured Image: Shutterstock/Fer Gregory