Damn amazing post Jay
If we happen to be a less established investor and we have no other assets, we may well allocate all of our investment into BTC until we reach a certain level that would thereby allow us to diversify after we had already reached a certain level of investment whether that is $10k or $100k or some other amount would be our determination regarding if we might need to start to diversify into other investments besides having everything into bitcoin.
What other assets do you think are worth considering in the current economic situation?
I don't feel very comfortable getting into discussions about the various ways to apportion your investment portfolio outside of bitcoin and the dollar (or whatever other fiat that you might have as your local currency).. so of course you have to measure your circumstances to figure out what your balance is going to be.
I don't have any problem with suggesting that any young / newbie investor to begin to build his/her investment portfolio by only focusing on bitcoin and cash, and once s/he gets up to a certain decently sizable amount, such as something like $50k, then at that point to consider the extent to which further diversification might be helpful. Of course, the decently sizable amount has a considerable amount of subjectivity - because there might be some measure in which there might be questions about whether the investor feels that s/he is starting to feel that s/he has too many eggs in one basket. Of course property and equity funds are not bad for attempting to offset having too much specialization but it might not even be any kind of compelling need to diversify until getting to some higher amount.. whether that is $200k or $500k or $1million.... at some point for each of us, we might feel some need to NOT have all our eggs in one basket.
Property for sure can tie you down geographically, contain a lot of expenses related to maintenance, taxes, ownership transfer costs and even an attack vector for possible liabilities and lawsuits that others can easily identify that you own it and viola.. all of a sudden there is a lien on it. But, if you are geographically tied down anyhow, and you need to live somewhere, so it is not a bad thing to store some of your wealth and to diversify outside of bitcoin (even though we also know that property is also suffering from the pumping/inflation mechanisms of the government debt systems).
I was discussing with friends last week and one of them said, trading is like gambling because one can lose all the Investment in the process of trading and also gain in the process of trading and I also see reason on the discussion, because trading also used prediction as gambling. I Know that they are not the same but in reasoning they are synonymous.
It’s just gambling if you don’t know what you’re doing and acting blindly. Acquiring shares of companies or something like gold, silver has nothing to do with gambling, capital needs to be allocated where value is created, for an economy to function.
I will supplement by asserting that there is value in the fact that people make different choices in terms of how much value they want to allocate into a variety of differing kinds of asset classes - and for differing reasons. If you consider your investment into bitcoin as a hedge against the dollar in similar kinds of ways that gold and silver used to be a hedge against the dollar, you might consider that in accordance with Gresham's law, bitcoin is likely going to suck away most if not all of the monetary value of gold and silver.. and maybe there might be some be some Armageddon-like fringe scenarios in which it would have been good to have some gold and/or silver.. but in some sense bitcoin is likely 1,000x-ish better than gold already.. so is there any reason to have both.. or maybe 1% gold and 99% bitcoin.. might be a possible way of allocating that portion of your hedging against the dollar aspect of your investment portfolio, perhaps?