Before you make fun of crypto losses, what is your portfolio?

cryptocurrencies are popular. If you are not a grust -grown old fuddy, you probably now have a lot. Even me, as grave as everyone else, have a couple.

Last year, the Financial Conduct Authority put the number of people in Great Britain who have crypto, to about 2.3 million, and in view of the publicity around the different currencies, it makes sense to assume that this number is already a bit higher.

This proves several surveys. Interactive investors investigations that around 45 percent of young adults (18-29) made their first investment in crypto. Data from Boring Money show that 11 percent of young adults (18-44) say that they have or obsess crypto-assets.

among those who have only invested in anything for a year or less, this number increases to 16 percent. Nice, one might think that young people deal with money and markets.

Unfortunately, it is more complicated than that. An "alarming number" of new buyers "financed this through a cocktail of credit cards, student loans and other loans," says Interactive. A survey by the FCA suggests that 58 percent of people who deal with this type of "risky products" can be advised by "social media and their friends", a strategy that has no financially outstanding track record.

The Ministry of Finance is concerned. This week she found that while the number of people who own crypto, "the understanding of what is crypto is actually decreasing, which indicates that some users may not fully understand what they buy".

This can be the case in particular if you rely on ads on social media and the London subway for your information. Consider one of the most discussed by Luno Money last year.

It was in very large letters: "If you see Bitcoin underground, it's time to buy." It has not weakened this appeal to the fear of missing something, even in very small letters, with the information that you would buy a volatile, speculative maybe asset that is highly likely to be associated with capital losses-and this could soon be banned by the Russian government.

There is a reason why the supervision of cryptocurrency advertising is now probably transferred to the FCA. Such ads must now be (like all other ads for financial products) "fair, clear and not misleading". I cannot imagine how a crypto advertising should be all of these things-for example in advance that it has no return, no obvious fundamental value and no recognized evaluation method-and should still be convincing. Something you can look forward to.

But here is a question for you. Would more precisely make a difference? When it comes to not understanding how investments work, it's not just about crypto.

if it were just. Interactive investor created a study that I loved last week. I often say here that the small investor should exceed the professional for the simple reason because we have something that he doesn't have - time. We are not responsible for our quarterly performance, but only ourselves for our long -term performance. Our retirement depends on the fact that we do more than wrong.

I was therefore pleased to see that the private investor performance index showed last year that normal investors exceeded the professionals for a few percentage points. Younger investors between the ages of 18 and 24 have also developed remarkably well in the past two years-an increase of 22.8 percent compared to 17.2 percent for a mainstream index-the Investment Association Mixed Investment 40-85 percent share sector.

and the "secret sauce" that drives the return? A higher allocation in investment.

So here is a question. I love investment funds. But do the new investors or the older investors who buy you know what you buy? This is partly a question of the structure of investment trusts. Your share prices can remove something from your net inventory value. You could buy them with a surcharge, which you do not indicate any of the investment platforms on your trading pages.

You may think that you have bought a fabulous story about durability, digitization, artificial intelligence, space travel or energy without fossil fuels. You may even have bought an asset that is very sensitive to changes in interest rates

But if the mood turns against you, you could end up selling your net inventory with a tee. Result? They have lost a lot more money than the change in the stock prices of the underlying stocks of the trust suggests.

But it's also about what you are in. The top holding company for the age group of 18- to 24-year-olds is Scottish Mortgage. SMIT holds many wonderful and exciting stocks with fascinating stories that you may want to keep in the long term.

Some now earn real money. Others not. But they promise enormous growth and huge profits in the (uncertain) future. These future profits will be evaluated by being discarded with reference to today's interest rates. The lower the interest rates, the more future profits are worth. So the lower the interest has fallen, the higher the courses of growth stocks have increased. In addition to the good stock selection, this is one of the reasons why Smit has developed so well for so many people.

You will see the problem. You may think you have bought a fabulous story about durability, digitization, artificial intelligence, space travel or energy without fossil fuels.

You may even have bought an asset that is very sensitive to changes in interest rates, or an asset that is known in the industry as a wealth with a long term, the price of which will fluctuate with the discount rate that is used for its evaluation.

"If inflation occurs - or rather a realistic possibility appears," said Jonathan Ruffer from Ruffer a few years ago, "you will see government bonds or technology stocks before dust."

good, we would be there. European value shares surpassed growth shares by almost 10 percent in the first 17 days of 2022, and US value shares are 6.4 percent before growth this year, says Duncan Lamont from Schroders. The Goldman-Sachs index of unprofitable technology companies had dropped by 14 percent at the beginning of this week.

and Scottish mortgage? I keep it and will keep it because I think that the future is usually going well. But while they have still increased by 230 percent in the past five years, they have dropped by 23 percent if they started three months ago.

Everyone who invested their money in expensive growth stocks last year did not know that it was obvious that inflation was not temporarily what would happen to their duration stocks if it was clear that the interest had to rise?

The ads for tech fund told them that there were risks, but this big one was not highlighted. Perhaps you will also wonder about some of your other stocks.

What about all these ESG funds? What is really in them? Are you perhaps too dependent on assets with a long duration-it is easier to put a technology share with little profit or a loss-making share for renewable energies in your average ESG portfolio than a miner with high dividends? Obviously different from possession of a portfolio of cryptocurrencies, but there are similarities. Think about how far the promise is removed and you could also consider crypto as a wealth with a long term.

My point? Anyone who has laughed a little about naive newcomers and their 10 percent losses at Bitcoin this year should quickly check whether they really know what is in their own portfolio.

Merryn Somerset Webb is editor -in -chief of Moneyweek. The views expressed are personal; merryn@ft.com ; Twitter: @Merrynsw