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Are NFTs the right investment for you?

This is not financial advice, do your own research and investigations. You can lose money buying NFT's.




Source: Fool.com


The NFT movement is new and is an early demonstration of the potential cryptos have to make the digital economy work for more people. Creating and selling digital assets might make a lot of sense for creators. But when it comes to buying NFTs for their value as a collectible, they are a speculative investment. Value is uncertain and will fluctuate based on demand for the work itself.


There's no set rule for figuring out which collectible will increase in value and which one won't. But identifying a new NFT trend early can pay off big later on. Some digital works of art that originally sold for petty values have gone on to sell for many thousands of dollars.

If you have an eye for art, music, etc., and you enjoy collecting, dabbling in NFT investing might make sense for you. Some things to look for when buying include the creator of the asset, how unique the piece is, the history of the asset's ownership, and whether, once owned, an asset could be used to generate income (for example, payment to view a piece or relicensing fees).


As to the argument that NFTs are a "bubble" waiting to pop, bubbles are usually only revealed in hindsight. But bear in mind that doesn't change the fact that digital assets could indeed cool off at some point in the future. Weigh the risks, and diversify your investments — perhaps by mixing in cryptos as well as stocks of businesses developing blockchain technology to your NFT portfolio.

NFTs are in the early days of development. It's a promising new front in the world of technology, but risks abound when investing in any movement's nascent stage. Tread lightly as you learn more about NFTs, and remember to stay diversified with your investments to limit the risk of any single asset derailing your wealth-building progress.





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