It’s still early in the year, very much prediction season. A flash indicator of exciting times ahead comes from Goldman Sachs, which is throwing its weight behind a rosy future for Bitcoin, with a call for a $100,000 price target.
A new report from the Wall Street behemoth shows that bitcoin outperformed all other asset classes over the past year, giving investors a 60% return. The next top performer was crude oil at 55%. The S&P 500, often compared with bitcoin, saw a 29% increase, while the top five was completed by Russell 1000 Growth and Nasdaq, both at 28%.
Gold, a classic safe haven for risk-averse investors, rose only four percent over the period, implying a market share steal by the high-riding cryptocurrency.
In a research note, Goldman Sachs’ co-head of foreign exchange strategy Zach Pandl, suggests bitcoin currently holds a 20% share of the gold/bitcoin store of value market.
Historical Performance And IFISA Process Guide
That figure is the result of over £24 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.