BlockBeats News, on August 8, U.S. President Trump signed an executive order on Thursday allowing alternative assets such as private equity, cryptocurrency, and real estate to enter workplace retirement plans. However, some investor advocacy groups warn that while these new investments may offer enticing returns, they also pose significant risks to long-term retirement savers.
Jerry Schlichter, founding partner of Schlichter Bogard, which specializes in high-fee 401(k) litigation, said: "The goal of ordinary people is to have a safe and reliable retirement plan, and new areas like cryptocurrency or private equity are fraught with various dangers for investors."
Investment experts typically recommend allocating core long-term investment portfolios to diversified assets that can provide stable returns over the long term (at least several decades). Jerry Schlichter pointed out that given the long-term upward trend of the stock market, broad-based stock index funds are appropriate 401(k) investment options.
The problems with cryptocurrency are evident. While some cryptocurrencies have delivered astonishing returns, these assets have been around for too short a time to prove their safety. "Cryptocurrency lacks a long-term performance history, and its short- to medium-term performance is extremely volatile," Schlichter said. "If you don't understand this investment, you shouldn't rely on it as part of your retirement assets." (CNBC)