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RE: Unsure - What direction to go.

in #money7 years ago

I wonder, what is your stance on the current state of affairs in cryptoland, will things keep on the rise > big crash > slow grow > big boom fomo then crash cycle? When is the best time to enter! so many questions when buying. haha.

This is a good question. Anyone who answers with anything other than, "I don't know" is probably wrong.

In my opinion, the best thing to do is treat cryptos like any other investment. They should be a fraction of your investment portfolio that represents your risk tolerance. Since they are extremely risky, they should only make up a small portion of your portfolio. For me, that is about 1.5% right now.

After the next business cycle we will know a lot more about how risky cryptos are and which ones are good choices. Until then we are flying blind. The large number of people who think that cryptos are not subject to the same market forces that make speculative bubbles appear in other assets are a sign that we should be cautious. Think about how you would feel if you saw the Bitcoin dropping 90% and staying low for a month. If that scenario gives you heartburn, then you might be in too deep already.

I like to buy on a schedule if I can afford it. Budget it in.

If you are looking to increase the fraction of your portfolio in cryptos, then buying a fixed amount at the market price on a regular schedule is a good way to go. It gives you a small hedge against big price swings.

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