Post
Topic
Board Speculation
Merits 1 from 1 user
Re: Buy Buy Buy or Sell Sell Sell?
by
JayJuanGee
on 25/04/2024, 03:25:03 UTC
⭐ Merited by vapourminer (1)
[edited out]
But this springs up a question, what about those that are actually investing in bitcoin with money there would missing this case I don't mean over investing or allocating to much but for someone at retirement that has been accumulating bitcoin to live off it, and has been investing his retirement funds in it, what do we say of this.

I cannot tell you.  Since part of the justification for diversification is that you don't necessarily have all of your value in one thing, and I am not even suggesting that diversification is a good or necessary thing until maybe you start to get to the point that you have more than a year's income/expenses in bitcoin.

Sure, there are going to be some people who decide only to invest in bitcoin and cash an to maintain a bit of a narrow set of assets, but that surely could end up getting them in trouble if something ends up happening to bitcoin.

So  yeah, you are investing money into bitcoin that you don't need for 4-10 years... but you are expecting bitcoin to still be alive and well in those later times after you had invested so much into it, and surely I can understand that, and I cannot exactly tell you what to do, except for just say that bitcoin is not guaranteed, and if you are not protecting yourself, then no one is going to bail you out... so you have to figure out some kind of ways that you are happy with the level of balancing that you are doing regarding what kinds of things that you have besides bitcoin, and if bitcoin is the ONLY thing that you have, then you might be in a situation in which you are not diversified enough.. and no one can tell you what other things to invest into, whether it is property, stocks, bonds, cash equivalents, commodities or whatever (and surely I am not suggesting shitcoins at all, but some folks might keep some value in shitcoins - hopefully not more than a few percentage, but there is no way to stop people from coming to conclusions about what they are able to do based on what kinds of resources they have).

Maybe you don't even really need to be thinking too much about diversification in the first 4-10 years of your bitcoin investment, and there surely are some rich folks who likely are not diversified enough, but that is how they live.  There is a famous quote from Warren Buffet in which he says that you gain your wealth through concentration, yet you preserve your wealth through diversification.

I have not updated my own chart that describes wealth distribution recently (since it was last updated in mid-2022), but even though I have a lot of value in bitcoin, I started out with enough wealth in other kinds of assets that they would be able to support me, so even though my bitcoin has become greater than 80% of all of my other holdings, the other 20% of everything else could support me if bitcoin were to go to zero.

So, no one can tell you what to do or how to do it, but hopefully as you invest and you grow your investments and you learn along the way, your own portfolio and your decisions along the way will inform you about how to make those kinds of distribution, allocation and/or redistribution and/or reallocation decisions.