So Trump just dropped an executive order that’s basically like telling your retirement account, “Hey, want some spicy investments with that boring old stock portfolio?” Now you can potentially stuff your 401(k) with crypto and private equity alongside your traditional stocks and bonds. But before you start YOLO-ing your retirement into Bitcoin, let’s talk about whether this is actually a good idea.
The “Hell Yeah” Camp
Look, crypto has been on an absolute tear in recent years, and private equity has been the cool kids’ table that regular investors couldn’t sit at. Rich Powers from Vanguard thinks this could be game-changing, especially if you’re young enough that retirement feels like a distant planet. His logic? Private markets often deliver their biggest wins over longer timeframes, so if you’ve got decades before you need the money, why not let it ride?
John Toomey from HarbourVest Partners agrees, basically saying “treat these like you would any other investment” – which sounds reasonable until you remember that most people treat their regular investments like a slot machine.
The “Pump the Brakes” Reality Check
Here’s the thing nobody wants to talk about at the crypto dinner party: these assets are riskier than your ex’s driving. Crypto swings harder than a playground, and private equity comes with all the transparency of a government black site. Plus, good luck trying to cash out quickly if you need the money – liquidity is not these investments’ strong suit.
So Who Should Actually Do This?
The experts seem to agree on a few things. First, this makes the most sense if you’re young and have time to weather the storms. If you’re 55 and eyeing retirement, maybe stick to the boring stuff that won’t give you heart palpitations when you check your balance.
Second, you need to actually understand what you’re buying. Jason Lee from Chime puts it perfectly: “The people who win in the long term are the ones who keep adjusting.” Translation: if you can’t be bothered to learn about these investments, don’t buy them.
The Bottom Line
Here’s the beautiful part: nobody’s forcing you to do anything. As Lee says, think of this as “menu expansion” rather than a mandate. You can absolutely stick with the classic stock-and-bond combo if that’s your speed. Your 401(k) isn’t suddenly going to transform into a crypto casino unless you want it to.
The smart play? If you’re young, have a long time horizon, and genuinely understand these investments, maybe allocate a small portion to alternatives. But if you’re the type of person who panics when the stock market has a bad day, crypto and private equity are probably not your friends.
Remember: retirement planning is a marathon, not a sprint to the moon. Sometimes the boring choice is the right choice, and there’s absolutely nothing wrong with that.