My Greatest Weakness as an Investor (Perhaps Yours Too?)
I've been spending some time reflecting on my strengths and weaknesses as an investor.
I feel like what's potentially my greatest weakness is the difficulty that I have sitting on (fiat) cash. I always feel like I should instantly do something with it and invest it some place else, rather than sitting on it and waiting for the right opportunity to present itself.
I feel like this is a problem that many people face in their 20s and 30s, and ultimately stems from a lack of patience.
DISCLAIMER: This is NOT financial advice. I am just offering my opinions. I am not responsible for any investment decisions that you choose to make.
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You are not alone! I think that having a stake and interest in the crypto market teaches us how weak and vulnerable fiat is which concerns us to hold it as we get it. I think a strategy to ensure that we are paying down any debt we have that would be detrimental to our lifestyle if things were to go sour in general then allocate to invested assets. I have found myself increasing my position in silver as well as a precaution. Recently, I have been thinking of also putting a portion into stablecoins as well. While not a hedge against fiat devaluation, it could provide an easier transition into crypto if needed.
I think the best are algo traders. They are savages. As humans, we have faults and emotions; that's ok!
You are spot on. As the market was crashing I got FOMO every time it went up even a tiny bit. Every paycheck was used to buy crypto.
The truly messed up thing about this situation is that I was very fairly certain that the bear market was coming, and that it would be obvious that it was over by stabilizing for at least a month.
Welp... Bitcoin has been stable for over a month, and if we pass through this wedge and continue a stable trend that will be all the confirmation I need to know that it's actually safe to reenter the market.
I lost a lot of money by not listening to my own logic on the subject. That is the most frustrating thing about all this. Luckily, there is still a ton of growth left to be had.
What would you think about a stable-coin that was pegged to USD, but attempted to account for inflation? I think that would be a very interesting project. You could have a stable-coin while also making those 2-3% gains every year.
On a side note: I think Maker and Dai will reign supreme in the stable-coin space. In addition, I think the MakerDAO is in a prime position to create a coin like the one described above.
Check this out:
Maybe that is really not a problem at all: Successful investing isn't about timing the market, it's about time in the market..
The same thing happens with me, I just can't sit with fiat. This is probably the reason why I have more than 90% of my money in crypto. I don't care if it goes down or touches 0 because all I have is because of crypto and steemit.
Oh and you should upvote your post after 15 minutes because HF20 did some alterations to the way curation rewards are given.
I didn't know this. Thanks!
Indeed, all the curation generated by upvoting before the 15 minute mark is burned back to the reward pool instead of going to the author.
I feel like we are around the peak of the current financial cycle. I would love to have a bunch of cash for whenever the the market takes a dive, but also want to keep enough skin in the game to profit off of further gains.
Recently I've been putting 20% in cryptos, 20% real estate, 40% in stocks, 10% gold ETFs and 10% cash. I'm 28 years old and share a lot of the same feelings of gratitude to myself for my desire to invest and save. Compound interest will be our best friend!
I try to keep a minimum level of cash in order to cover any interest on debt of a year as I believe in a year I have the ability to change the situation I will be in. Outside of that and spending money I invest all of the money confidently knowing, worst case scenario I have enough money to last me a year as well as having time to generate more cash in a worst case scenario.
Well, there has probably never been in your lifetime (as an investor) a time when cash was a good investment. So your instincts are totally appropriate. Leaving aside the obvious benefits of being clairvoyant and being able to go to cash immediately prior to a crash ( whether it be in equity or cryptocurrency) cash has never been “king” in your era. I hope it never will be again. Cash becomes king when interest rates are high of course. Sometimes they are high because governments set them so, in order to tame inflation. So be glad that you have never lived through such a period. Your aversion to holding cash is rational. Of course you are allowed to be careful. The choice is not between keeping cash in your mattress and buying Crypto. You can buy debt ( bonds) or equity. Some equity is almost as safe as cash and pays dividends.