Post
Topic
Board Speculation
Merits 1 from 1 user
Re: Buy the DIP, and HODL!
by
Tungbulu
on 08/05/2024, 01:44:11 UTC
⭐ Merited by JayJuanGee (1)
Even though an investor doesn't have a good income source to keep a reserve and float funds, it is okay, but the investor should always make provisions for emergency funds, even if he has to reduce the money he will be using to accumulate bitcoin weekly or monthly just to build up emergency funds. It is important to have emergency funds when investing in bitcoin so that if any emergency happens, you will have what to use to settle the emergency and not depend on your bitcoin portfolio to solve it.
Exactly one of the reason I strongly preach against lump-summing as a formidable technique when accumulating bitcoin. Lump-summing could lead to aggressive accumulation that may affect other areas of your finance. People should always know that, inasmuch as your investment is necessarily important because it takes care of your long-term goals, there are also short-term goals one needs to meet, it could be from getting groceries to paying some bills at home.

When one adopts an aggressive pattern of investment, or should I say an over aggressive pattern of Bitcoin accumulation, through lump-summing, DCAing or any other accumulation strategy, one can easily forget the need for these short-term goals which are also important and immediately necessary for you to take care of them. Somee invest all their money without seeing the need to focus on these short-term needs, without even considering them as they prioritise their investment over every other thing.

Asides investment, Daily needs will arise, weekly needs will arise and there'll always be monthly bills to pay and most certainly, Emergencies will arise sometime in the future and all these needs to be well prepared for, and being too aggressive will never give you time to consider these facts and when eventually these needs comes up, they run to their investment, maybe take out the profits, (which isn't always the best thing to do in an investment See JJG's Power of Compounding Theory and it might perhaps give more insight to why it's a bad idea to always take out profits) or they ahead to sell a portion of their investment to sort out these things and sometimes at an unfavorable and unreasonable prices, due to lack of adequate preparation for these events.