Caveat Emptor – Revisited

Regular readers of the KCS blog may recall a post that we produced on July 30, 2018, regarding cryptocurrencies. We had discovered a chart that highlighted the fact that most cryptos had failed as of that date, and we were concerned based on comments that we had heard at various industry conferences that DB plan sponsors and their consultants might be contemplating a potential investment into one or more of these instruments.  Let’s hope that they didn’t!

Earlier today, Bitcoin’s price was at $3,729 down from $6,404 one month ago and more than 80% off the high established on December 16, 2017 ($19,650) – oh, my. Based on the chart that we presented, Bitcoin was one of the few “success” stories, while more than 1,000 other cryptos had failed already.

In a challenging environment for most asset classes and products, it isn’t surprising that gimmicky investments, such as cryptos, capture the imagination.  However, as we’ve mentioned many times, the focus should be on the promise that was made to participants and use that insight to drive asset allocation and investment structure decisions. You’ll get a very different answer to the difficult question of how do I secure those liabilities.

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