How many people caught the news last week that Facebook officially changed its corporate name to… Meta? And changed its stock ticker symbol to MVRS? Presumably, MVRS is short for “metaverse.” What is the metaverse and is it the next “hot” investment? (In other news, Facebook is looking to distance itself far, far away from discoveries that the company knew full well for over a decade the damage its central social media platform would inflict and has inflicted on people of all ages, especially children. But that is not the topic of today’s TGIF 2 Minutes.)
Regarding Meta, CEO Mark Zuckerberg says succinctly, “the metaverse will be the successor to the mobile internet.” Gaming and alternate reality seem to be at the forefront of the concept with bitcoin and cryptocurrency central as well. The whole thing sounds huge.
Whether or not and how to invest in the metaverse are tougher questions to answer. To put these questions in perspective, as a financial adviser I have been asked over the years if it makes sense to invest in various things and areas including:
- Individual company stocks, technologies, or sectors
- Artificial Intelligence
- Brazilian government debt
- Private Equity
- Certain areas of real estate
- …and more.
Investing in the metaverse should not be terribly different.* There is almost no way to find out if something is a “hot” investment except to put up a certain amount of money and simply go for it. Watching from the sidelines is another option but may defeat the purpose. One of the obvious considerations in evaluating the decision of whether or not to invest in anything, especially the stock market, is to understand the inherent risks.
Ways to offset the risk of investing in stocks and sectors range from:
- investing a small or manageable amount of money (an amount that if lost would not cause a person to go broke),
- investing in a larger universe, or multiple sectors, to offset the risk of investing in only one thing,
- investing in the whole US or global stock market to participate in the gains (and losses) of the entire world of stocks.
The last choice, although it may sound boring, has proven to build wealth over the long-term – although possibly at a slower pace than getting hugely lucky by precisely timing the purchase of the original Facebook (far after its IPO) or buying a company like Shopify (SHOP) at its inception.
An investor who owns a portfolio of globally diversified, low-cost stock funds will likely participate – however gradually – in the metaverse by virtue of owning pieces of the thousands of publicly traded companies on the forefront of “the metaverse” and beyond.
*There are known and unknown risks to all investments.