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Bitcoin is not the value that everybody thinks it is: Fitz-Gerald Group CIO

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Keith Fitz-Gerald, Fitz-Gerald Group Chief Investment Officer, joins Yahoo Finance to discuss outlook on the housing market, cryptocurrency, and ways to diversify your portfolio.

Video Transcript

ALEXIS CHRISTOFOROUS: Say hello to Keith Fitz-Gerald of Fitz-Gerald Group. He is the chief investment officer there. Keith, always good to see you. Hey, look, I'm going to start with cryptos with you for a minute because Jared was just talking about that bounceback a moment ago. I know that you are actually a believer in some of the cryptos. And I'm not talking Bitcoin. Tell us what you like right now and why.

KEITH FITZ-GERALD: Well, I think you've got to draw a very clear distinction between Bitcoin and something like Ether, for example, Ethereum. That's really the digital programming engine for all of the blockchain technology. I think it holds its own value as a result of that. Bitcoin, you know, as interesting as it is, is not necessarily the value that everybody thinks it is. Price is one thing, value is another.

KRISTIN MYERS: All right, so Keith, I do want to pivot away from cryptocurrency right now and ask about housing, just because we had seen some of those housing prices. We have so much to get with you, Keith. We like to hit you with everything. So we seen some of those housing prices surging to some highs that we haven't seen in about 30 years, three decades. Just curious to know how you're approaching the real estate space right now, if you think that this is something where there is a bubble forming at this moment.

KEITH FITZ-GERALD: Well, I tell you, I have a highly technical term for what's happening with housing prices right now. It's bananas. I think you've got to be very, very careful. Because the urban exodus, the dislocation as a result of COVID and all sorts of other things in our urban areas, may, in fact, boomerang on people. I think if you're going to play real estate, and you're going to do it for income, that's one thing. If you're going to do it for appreciation, another.

The only space I consider investing in right now is actually one of great irony. It's institutional places, institutional holdings where you've got tech companies and medical companies. There are some very specialized REITs out there, the names of which are escaping me at the moment because I haven't had enough coffee. But that's how I look at that space at the moment.

ALEXIS CHRISTOFOROUS: Hey, Keith, I want to go back to cryptos for a minute. Because I'm curious how much you are dedicating to Ether in your portfolio. And what would you tell investors who are looking to dip their toe into that area? We know we don't yet have a crypto ETF in this country. We're still waiting for that to happen. But what would you say to folks who want a little bit of exposure, have a little bit of money to put in that space?

KEITH FITZ-GERALD: I think that's a great question. We struggled for a long time to try to find a number that we're comfortable with. Personally, I think 1/2 of 1% is going to provide some diversification. There's still a long way to go in this game. If you're going to nibble in, don't do it all at once. Don't jump in with everything you got. That's not the way to approach this. What I am personally doing is buying just a little bit every single week. And I'm dollar cost averaging in, or really, Bitcoin or Ether at cost averaging in. Because I think it's a store of value. I'm really not concerned with the price here. It's a cash alternative, the way I see it.

KRISTIN MYERS: So Keith, I was actually looking at your notes. And on that point of diversification, you mention that. So other than cryptocurrencies, what else are you looking at to diversify your portfolio right now?

KEITH FITZ-GERALD: Well, it's one of focus. Diversification is a great misnomer because the way it used to work is no longer the way it does work. I think you've got to concentrate on great companies. You're going to be very disappointed with the indexes in general. Because it's a lot like buying cable television. You got to get channels you don't want to get the few that you do want. And investing is a lot like that in today's world. So I'm very focused on technology. I'm very focused on medicine. I'm very focused on bio-development, clean energy. Because those are the trends that are going to power our world. I don't think you can diversify by sector any longer, effectively.

ALEXIS CHRISTOFOROUS: All right, we are going to have to leave it there. Keith Fitz-Gerald of Fitz-Gerald Group, always good to see you. Thanks for being with us.