Prices for units of cryptocurrencies have been soaring, prompting some folks to ask if we are nearing a cryptocurrency bubble? In a recent piece on Advisor Perspectives, economist and mathematician Michael Edesess says we probably won’t see a true bubble and bust of valuations, as there are aspects of the asset that would prevent such a fate. Edesess, adjunct associate professor and visiting faculty at the Hong Kong University of Science and Technology and chief investment strategist of Compendium Finance, warns advisors that cryptocurrencies can be volatile; but it's not like betting in a casino or buying a lottery ticket, he argues. “In some ways, investing in cryptocurrencies is like investing in art or collectibles, or even gold," he writes. "Its scarcity may propel increases in value, at least for those cryptocurrencies that continue to have value at all. But cryptocurrency has the advantage of being much more easily used as a medium of exchange than art, collectibles, or gold."
Boomers Falling Short of Retirement Goals
According to data released by Legg Mason, Baby Boomers have less than half of the savings they think they will need for retirement. The generation has an average of $263,000 saved in defined contribution plans, while reporting they will need $658,000. Even older boomers, aged 65 to 74, only have an average of $300,000 saved. Thomas Hoop, the executive vice president and head of product and business development at Legg Mason, said advisors could help close the gap by helping clients save more and educating them on how to invest DC assets properly. Hoop said older investors should consider a larger, diversified allocation to equities that includes emerging markets and European markets that have lower valuations and higher dividend yields. “An overly conservative approach to DC investing can almost defeat the purpose of the plans’ benefits for investors who want to achieve their long-term goals.”
SEI Steps Into the Family-Office Arena
SEI, a provider of back-office operations for financial services firms, has acquired Archway Technology Partners, LLC, which sells technology and services to family offices. “Archway’s specialized technologies and deep knowledge of the private-wealth services industry give us a more powerful, differentiated solution to a $7 trillion global family-office market that has been underserved by legacy service providers,” said Steve Meyer, executive vice president of SEI and head of its Investment Manager Services division. The acquisition positions SEI as a market leader in the single- and multifamily office-services arena.