Post
Topic
Board Speculation
Re: Buy the DIP, and HODL!
by
rachael9385
on 21/09/2023, 13:46:06 UTC
You can still end up overinvesting and getting your self into the same kind of lack of an emergency fund, even with DCA.

DCA does not completely reduce the problem of overinvesting, but surely it can manage the overinvestment temptations that cause people (maybe moreso newbies, but it can happen to anyone who is overly investing and not sufficiently preparing emergency funds and projecting out cashflows for a sufficient amount of time in advance)..
I get the point now, even with the use of DCA strategy without the plan for emergency funds investment could go very bad were as  you could be lack of funds when emergency needs will arise and as such you will be left with no option but to sell from your investment, perhaps I overemphasize DCA on one direction which is to solve the problem of overinvesting and risk management for accumulating a bit by bit forgetting the need for emergency funds which is very important and essential which will help and spice up DCA strategy knowing fully well that as your accumulating using DCA method your also adjusting to your emergency funds.
It is good that you already know how important it is to keep emergency funds. Investing all of your salary in Bitcoin is not advisable because you can easily sell your coins when matters arise, so as you are investing some of your salary, you should also save some for emergency issues.
It is good to accumulate more BTC, but your accumulating strategy should be in a proper way. Although it is not a bad idea as you are using the DCA method to accumulate, you should also save funds for emergencies. An emergency can occur any moment, so it is good to get prepared for it so that when it comes you will not think about selling your coins.

Some people who don't save up for emergencies use the coins that they have accumulated for months or even years to sort out solutions to their emergency problems and, after they might have settled their emergency problems, they either start afresh to accumulate or they quit their investments, so instead of any of us to be in that category we should learn to save money for emergencies.