Back It Up

On a scale of 1-10, how bold do you think you are as an investor?

I put myself at a 4.

Should I be bolder?

It is a rhetorical question I asked a friend in regards to my investing strategies, as I feel that I am not bold enough in my movements. For instance, we are hitting ATHs in Bitcoin and it hasn't flowed that strongly into alts, so it might be a good time to skim a little and buy some of the tokens that I find look interesting. Perhaps, I would then be able to catch the ladder upward on the alts, when the inevitable correction on BTC arrives.

Or something like that.

I am not a very good trader.

I don't seem to find the time like I used to back five or six years ago, and I don't think I am as bold as I was. There are a few reasons for this perhaps, one being age, but the other being experience. While the "wins" were great when they happened, I also have suffered quite a bit of loss, where I have made rash decisions. Buying too early, selling too too early - selling too late.

I guess the other aspect is that the amounts are a bit larger too now. Back in the past, playing with 30% of my holdings still didn't amount to much, so if I lost it, it wasn't going to be the end of the world. Doing the same now would come with a much larger fail impact. But, this is why I am wondering about boldness, because while there is more risk, there is also a fair bit more to gain, and the difference it makes on my financial situation is potentially quite extreme.

It is always interesting to look at the percentages of things, where for instance people will say "save 10% of your income" consistently, which isn't bad advice. But, there is a difference if you earn a 100 a week or a million a week, isn't there? While saving 10 a week might be difficult on an income of 100, it should be pretty easy for someone earning 50 million a year, to put away 80% of it and still have an "okay" standard of living.

When living off 20% of the income is 10M a year.

It also means that "playing" with 2% of the income on the markets, is a million in the pocket, and it would be pretty easy to play with 5M and if losing it all, barely feeling it. But of course, the actual chances of losing it all are pretty slim, especially in the traditional markets, where it is possible to take a percentage across high to low risk and yield assets, to mitigate losses.

But, these are examples of extremes on the scale, where there is one that is pretty dire, and the other that has incredible excess. The challenge is a little bit up from the dire range, where there is something, but there is also a fair amount of financial need. At this range, while there might be the ability to save, it isn't enough to be "throw away" money and loss is will impact on standard of living and opportunity. This means that the "percentage approach" works, but the mindset is generally more conservative, with less going into risky assets.

I am in this category.

But, nearly everything is in crypto, so it is all exposed to the fluctuations of the markets, so taking a 95% technical loss at the depth of the bear is familiar. What I should have been doing if I was smarter, was skimming off earnings continually to go into more traditional assets, but there is also the "greed" aspect of it, where I also work under the assumption that crypto will be the most profitable by far.

Perhaps the other difference since "back in the day", is that I have gone through a lot personally in that time and my brain has been literally physically affected. A lot of trading is about mindset, and I think that my current brain isn't well conditioned for trading. It makes me less confident, more indecisive, and also hampers my ability to learn. This last point means that I am far more likely to operate on defaults that are ingrained in my habits, than explore new options.

Invest into what you know.

Which is why most people will invest into what everyone else is investing into, because they are comfortable doing so. The average person doesn't really explore the options available, and most of us are very risk-averse, so we won't even think too much about putting a percentage into high risk vehicles. But, this also means that "high risk" is anything that we don't know much about, so we can think it is high risk, even though it might not be.

Is crypto high risk?

Well, a lot of it is, but I am of the opinion that the industry itself is going to start moving into more mainstream areas, and the risk will come down, because *people will know more about it. Things seems far less risky, when we feel we understand what is going on.

And, maybe this is why I should be a little bolder in some of my crypto activities, because I do think I know something, and I also think that there is a future. I am not looking for a quick exit, I am looking for a sustainable lifestyle. Nothing fancy, but something somewhat reliable, that gives my family options that they wouldn't have otherwise.

1-10, how bold are you as an investor?

Taraz
[ Gen1: Hive ]