Embracing Volatility: Why Risky Investment Assets Should Not Be Avoided

This research article explores the generally accepted approach to avoid highly volatile assets in terms of its impact on the structure and performance of investment portfolios. High-risk assets, particularly cryptocurrencies, can be critical to the strategic allocation of an investment portfolio and should not be considered a speculative tool. On the contrary, such an approach becomes necessary to achieve long-term financial objectives, especially under the changing financial environment in 2026-2027, which is characterized by technological breakthrough, declining profitability., and persistent inflation. This paper is based on historical profitability data from 2015-2025, supplemented by a comparative assessment of the risk-return ratio. Cryptocurrencies and stocks are characterized by significant short-term volatility. However, when invested long-term, these assets can provide higher returns. Furthermore, including them in a portfolio enhances diversification, confirmed by the results of the study. These advantages have become especially important in a modern financial environment, where bonds are no longer able to provide comparable returns. The analysis shows that including these assets in an investment portfolio can be justified if used prudently and rationally. If allocated in accordance with the principles of modern portfolio theory, such instruments can improve investment management efficiency. This approach reduces the negative impact of inflationary processes, which increase the cost of capital and, consequently, can weaken the quality of the portfolio. Illiterate management poses a much greater threat to investment results than the risk itself.