Crypto Pro Sam Bankman-Fried Warns Against Traditional Portfolio Hedges During Inflation

©Sam Bankman-Fried

Sam Bankman-Fried founded the cryptocurrency and derivatives exchange FTX in 2019, and it quickly has become the sixth-largest exchange by volume, boasting a $3.5 billion valuation. In 2021, he was named to Forbes’ “30 Under 30” list in the category of finance.

Recognized by GOBankingRates as one of Money’s Most Influential, here he shares the importance of paying attention to expected value when it comes to investing, and why it’s never a good idea to be too risky — or too safe.

What’s the one piece of money advice you wish everyone would follow?

Think about expected value. Your goal isn’t to win 75% of the time, it’s to win in expected value terms; don’t fall for trades that make 10% three-quarters of the time and lose 50% the other one-quarter.

Check Out: GOBankingRates’ Top 100 Money Experts
More Advice: Mark Cuban on the Importance of Doing Your Investing Homework

What’s the most important thing to do to build wealth?

Keep enough capital to be comfortable in safe assets, and be aggressive with the rest.

What’s your best tip for fighting the impacts of inflation?

Changing rates could mean that hard assets diverge from soft assets in the other direction, so be aware of the risk of multi-sector rallies or slumps. Don’t rely on traditional hedges working in your portfolio, and make sure you budget for the potential of increased prices.

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What’s the biggest mistake people make when it comes to money?

People oscillate between being overly aggressive [and] risking too much, and [being] overly conservative [and] failing to grow wealth. Instead, try to find and maximize opportunities while making sure to keep a safety net.

Jaime Catmull contributed to the reporting for this article.

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About the Author

Gabrielle joined GOBankingRates in 2017 and brings with her a decade of experience in the journalism industry. Before joining the team, she was a staff writer-reporter for People Magazine and People.com. Her work has also appeared on E! Online, Us Weekly, Patch, Sweety High and Discover Los Angeles, and she has been featured on “Good Morning America” as a celebrity news expert. 
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