FOMO is not part of my strategy
As many of you have now taken your first steps in crypto investment, I think it is time just to share something I saw on Reddit earlier today.
I may sound like a broken record with my repeated warnings but they are important, and I will continue to do them. Losing money you can't afford feels crap. I lost £10k margin investing in tech stocks a few years ago; it was horrid, I do not wish this on anyone.
I am writing these posts to share my reasons for investing and my strategy. I think the crypto market presents a great opportunity, but it also presents a risk, as with any volatile market.
I want to ensure that when any of you do get involved, you are clear on why you are doing this and whether you are investing or gambling.
It is easy to get carried away in a casino after a big win and lose everything. Crypto investments are the same. When the marketing is going crazy, and coins are seeing triple digit growth in a short amount of time it is easy to think of this is standard, question which coin next, which you missed out on and so on.
A sensible strategy is not about chasing these big jumps as they can easily lead to silly mistakes and big losses. Also, there are periods of stagnation, if you are caught in a bad trade and have not hedged the market you can be caught holding the bag on a downward investment. YOU DO NOT WANT THIS.
A wise strategy is based on sensible investments and if one of these has a pump then treat is as a bonus. An unwise strategy is looking for a quick buck.
I know I keep going on about being careful and repeating my warnings, but this is important. I do not want anyone to make a silly investment, lose a bunch of money and feel shit.
As such, here is a reminder:
- My reason for investing is a long-term growth of my investment as I don't have a pension. This is something I am doing to access in +10 years and expect crypto to outperform any other investment.
- My strategy is to invest in good coins, with a good team, good roadmap and thus a good upwards potential.
As such, I am hedging the majority of my investment in solid coins with a solid market cap. I am treating any quick pump as a bonus, and I am not worried about exiting a coin if I think it has pumped too high.
FOMO IS NOT PART OF MY STRATEGY.
I do make a few, very small speculative investments in coins with a low market cap and high potential. But note that, these speculative investments, thus risky and form a tiny part of my overall portfolio. Always less than 1%, as such if they pump then the returns can be great and if they fail then they do limit to no damage to my overall portfolio.
Steller is a great example of this. I wish I had put £10k in last week; I would have made over £100k and be car shopping this afternoon. I didn't because that would be a stupid investment. I put £200 in. Low risk, good upside potential.
As I have said before, the strategy is that I believe in the blockchain and the growth of the market cap of the entire market. As the market grows then so does my investment.
I have limited exposure to the crash of a specific coin, only the market. This is an investment strategy I am happy with because the market does crash at times but has always, in 8 years, retraced to new highs. The total market cap is now over $50bn, and it was $38.2bn when I started bloggin.g That is +25% in about a week, not bad really.
Therefore, if you are watching the markets always wondering where to move your money and sticking a large % of your portfolio on a small coin you are taking risks, gambling. A strategy I do not support in any way. If you are successful then good for you, if you lose money then I am sorry, but I just can't agree with it.
Please be careful, do not get over excited and do not make silly investments for a quick buck.
If you like my strategy and want help setting up a similar portfolio, then I am more than happy to help.
The difference between a trader and a gambler