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Which is riskier- investing in cryptocurrency or in the Stock Market?

 
 
Reply Sat 29 Feb, 2020 01:20 pm
Hi. I am just a bit curious about this.

I recall learning something about the Stock Market years ago when I was in middle school. I don't know that much about it.

I learned about cryptocurrency from someone I know who was involved with it through a chat site I sometimes visit.

I don't know too much about cryptocurrency but it seems rather ominous. Going by what I saw in this video I posted a link to in another thread a while ago:



cryptocurrency doesn't seem very trustworthy either.

Investing in the Stock Market and/or in cryptocurrency involves a lot of speculative risk.

Which is riskier?

Please help- thank you.


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Type: Question • Score: 4 • Views: 623 • Replies: 10
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oralloy
 
  1  
Reply Sat 29 Feb, 2020 11:44 pm
There are a wide variety of possible stock market investments, with a wide range of possible risks.

Some stock market investments are pretty safe, and are likely quite a bit safer than investment in cryptocurrency.

Some stock market investments are pretty risky, and are likely quite a bit riskier than investing in cryptocurrency.

I let my graphics card mine Ethereum when I'm not playing World of Warcraft. By mining it, I get it for free. It just slowly accumulates in my wallet.

It doesn't accumulate fast enough to make a living off from or anything. It's definitely not making me rich. But I'm making more money than I'd make if I just let my graphics card sit idle.
JGoldman10
 
  0  
Reply Tue 3 Mar, 2020 11:19 pm
@oralloy,
Hi. Do you know anyone personally who has invested in cryptocurrency and/or the stock market? Have they had any success?
oralloy
 
  0  
Reply Wed 4 Mar, 2020 04:03 am
@JGoldman10,
Yes on the stock market. I would say limited success (safe, non-risky investments). But not "gambling" means no big wins either.

Regarding cryptocurrency, does mining count? Or are you only asking about people who buy coins?

Because if mining counts, I certainly know myself.

I don't know anyone who has bought coins though, if you are looking specifically for someone who has done that.
JGoldman10
 
  0  
Reply Thu 5 Mar, 2020 01:26 pm
@oralloy,
The costs of stocks fluctuate. You are gambling when you invest in the stock market.

I assume that's why and how the phrase "buy low sell high" came about.
oralloy
 
  1  
Reply Thu 5 Mar, 2020 02:00 pm
@JGoldman10,
Some investments are more of a gamble than others. Investing in a safe reliable company is unlikely to result in a huge payout, but it is also unlikely to result in huge losses.
0 Replies
 
JGoldman10
 
  0  
Reply Thu 5 Mar, 2020 02:07 pm
The term "stock market" is not a proper noun. The topic question should have read:

Which is riskier - investing in cryptocurrency or the stock market?

-FIXED.
oralloy
 
  1  
Reply Thu 5 Mar, 2020 02:11 pm
@JGoldman10,
It depends on how you invest in the stock market.

Some stock market investments are pretty safe, and are likely quite a bit safer than investment in cryptocurrency.

Some stock market investments are pretty risky, and are likely quite a bit riskier than investing in cryptocurrency.
JGoldman10
 
  1  
Reply Thu 5 Mar, 2020 02:17 pm
@oralloy,
Spectulative risk is still gambling.
0 Replies
 
SethDunford
 
  1  
Reply Thu 30 Apr, 2020 09:17 am
@JGoldman10,
Right now cryptocurrency is less volatile than the stocks. But this may change anytime. Remember how Bitcoin went up to $10,000 and than rapidly fell to $4,000? In my opinion, this situation may repeat.
0 Replies
 
chai2
 
  1  
Reply Wed 6 May, 2020 03:01 am
Risk is a relative term.

The stock market would indeed be risky is you were buying stock like throwing darts blindfolded at a dart board.

In reality, an intelligent person wouldn't buy a stock that way, including buying a stock because your cousins best friend told you it was a good stock.

If someone tells you to buy such and such a stock, your first question should by "Why?"
If the other person can't give you reasons that shows they have studied the financials of the company, they are just talking out their hat.

Instead, you learn how to determine yourself what would be good stocks to buy (not going to go into this with you, as you are never going to do any of this)
You also set up safe guards to keep you from losing all your money.
For instance, when you buy a stock, you set a Stop Order.

Let's say you buy shares of a stock at $25 a share.
You've determined, by (for instance) studying the charts of that stock, that you would be willing to risk losing $2 a share in case its performance goes down.

So you buy the stock at $25 a share, and set a stop order at $23 a share.

Worse case scenerio, the price of the stock soon drops under $23 a share, and the stock automatically sells itself. You lost only $2 a share.

But, if your research on the stock is correct, the price of the shares go up.
Let's say for example the price of the shares rises to $28 a share. You've already determined if the stock goes that high, you will reset your stop order for $25 a share. That way, if the price goes down below $25, it automatically sells, and you've lost nothing.

Then, as the the price of the stock hopefully continues to rise, you can start raising that stop.
The stock that is now worth $28 a share? It will fluctuate daily, sometimes dropping, sometimes rising.
You may have decided through continuing to monitor the trend of the stock that if it rises to $30, you will reset your stop order to $27 a share.

Then, if the stock drops below $27 a share, it sells itself, and you've made $2 a share, which is an 8% gain.

You monitor the price of the stock, and has it rises, you keep raising your stop order.

I just glanced at an old spreadsheet, and I see where I once bought a stock at about $47 a share, and when it finally sold, it was at $67, or about 40%.
Of course during that same time, other stocks sold where I made less than 1%, or lost 2% to 3%, but overall over a years time I would average about 15%

You're asking if something is risky is like asking someone if riding a horse is risky or dangerous.

It is if you don't know what you're doing. But if you know how to ride, you'll most likely be fine, and have fun.

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