When gold prices (in dollars) soared from 70s stagflation, then crashed, was it smart to sell the top? OK, how do you know what the top is?
In gold’s extreme, extended bear market, after it started crashing, was it smart to sell at $800? $700? $600? Selling for $600 and later re-buying for $300, you could have doubled your gold holding.
...$500? $300? $260? Whoops! Selling for ~$260 (IIRC*) would have been mindrusting gold.
Holding gold is always safe, if your biggest concern is not to be stuck with less gold than you have already accumulated.
Holding BTC is always safe, if your biggest concern is not to be stuck with less BTC than you have right now.
* Numbers here are tossed off the top of my head to make a point. If someone corrects any errors as Jay corrected my recollection of when Slaying the Bearwhale occurred, then... eh. Here, at least, it will not change my point.
So you are saying investors should only accumulate gold or BTC to increase their portfolio? If you do not extract some profits from your gains and reinvest them in that same assets or something else then
you are not an investor. You are more like a collector. Professional investors always circulate their money in the different asset classes. If you do not know what the bottom or upper limits are then follow the market sentiments.
If you think of yourself as an investor you must keep track of the market about what's going on. Many people think a bear market is a downside of our economy but wise investors knows this is their opportunity. You can get things with a high discount price in a bear market so buy when everyone is selling and start selling when everyone is buying. This is that simple if you do not know about price actions charts or fundamental analysis.
Semantic game, No True Scotsman, and an absurdity: What you mean is that I am not a
trader. You are repudiating the whole concept of “buy and hold”. (Also, you implicitly figure PnL in dollars—not in real money, i.e. BTC. For my part, I sometimes spend BTC on investments to make more BTC. Figuring PnL in a depreciating, perpetually devaluing currency is extremely stupid.)
You say “collector” as if there were something wrong with that. It is funny, because I have called myself a “collector” in my own thoughts about investment strategies. My explicit goal is to collect and to accumulate valuable things, and to keep them.
In stocks, would you call Warren Buffet “not an investor”? Buffet is a damnfool about Bitcoin; he should stick to what he knows, and he does know stocks! He is the most famous (and only most famous) investor who takes the
extreme buy-and-hold approach to stocks.
I call the extreme buy-and-hold approach to investing:
If you buy something good, the best time to sell is never. Selling is an admission that you made a bad call when you bought—either you bought too much of something that’s not good enough (so, reduce your exposure to it), or you bought something bad (get out! run away!). It happens. Nobody makes the right call on 100% of investment decisions.
Of course, it is not the only good approach. But in my opinion, it is the only good approach that >99% of people can achieve.
I can see you agree with me here. The basic rules of investment are circulating your wealth to make more assets. It doesn't matter whether you are converting your BTC in fiat or not. The primary approach here is to increase your wealth. This is the main goal of investment and every successful investor do. The market goes ups and downs which gives investors the opportunity to increase their wealth. It is not a straight lineup. If you are not circulating your assets to buy other assets then you are just ignoring the basic rules of investment. I think nobody has unlimited money so that they can only buy and hold.
Do you know how warren buffet like investors makes a hell lot of money? They buy small stocks or real estate when the market is declining and sell it when it's strong. The rule is this simple. Then they buy bigger stock or real estate. They start small and increase that same money through investment. They are billionaires not because they only keep buying stock and hold it. No one has an unlimited bucket of money. They are billionaires because they know how to reinvest.
If your intention is not to sell ever then it is not your wealth. We do not have unlimited lifetimes.