I am also suggesting that the three options available for the guy with $6k to supplement his already exiting $100 per week DCA also involves considering how to treat the upfront $6k by considering that money into the three categories of DCA, lump sum and buying on dip.. and sure he could divide 1/3 into each of those categories or he could decide some other way of apportioning within the three BTC accumulation categories.
I think I get a clearer view and understanding of the hypothetical scenario you referenced.
Of course, I might not have had been very clear in the contrasting scenarios that I was trying to make and then you took the matter in another angle, which is not necessarily a bad thing, yet it ends up playing out as a different kind of hypothetical and a different point.
And yeah combining the 3 accumulation strategies and spreading the $60k across the different strategies may indeed maximize potential returns while also minimizing the risk of losses as long as the investor still maintains the long term perspective.
A lot of times, I suggest that guys should at least consider all three possible accumulation methods when they are faced with a lump sum or other opportunity, and even if they consider all three, they surely would not necessarily need to apply all three or even be advantaged in applying all three.. It is just a consideration that I believe that guys should make when they come across a situation in which they have a lump sum available to them, whether they get that lump sum opportunity at the very beginning of their being involved in bitcoin or whether some kind of lump sum amount comes available to them down the road after they had already been in bitcoin for a while.. whether it is a yearly bonus or maybe an inheritance or proceeds from the sale of property or other assets or some other way they get some extra money.
This hybrid approach helps the investor to be able to harness the advantages of the three strategies all at once. By setting aside part of the money for constant DCA buying, the investor may be able to reduce timing risks and also ride out ride out market volatility while also spreading out the investment overtime, and by using another part for lump sum buying, he’ll be able to capitalize on the potential growth of the investment, and by setting aside the last portion of the money for buying the DIP, he’ll be able to take advantage of the market when there’s a downturn in the market.
I do think that with each of the methods, there are trade offs, and surely we are put into a different situation when we have the money right with us at the moment versus if we might be anticipating getting some money in the future, yet that money has not yet arrived in our account (or our hands), and so frequently DCA can either be thought of as a time-based delayed investment or it could be thought of buying BTC right away with as much money as we have available to us as soon as it becomes available to us. Frequently it can be better to NOT treat money as being available until it arrives in our account, even though there are sometimes when guys do end up wanting to lock up their future payments in the form of a loan, which is not necessarily a bad thing, but could cause regrets if the BTC price goes down instead of up and surely loans tend to have their own costs and/or risks so there should be various ways to service the loans, even if they anticipated future income that was meant to service the debt ends up drying up. One of the erroneous ways of thinking about loans that are used for buying bitcoin is to be able to service the loan with the future appreciation of the bitcoin, which does not necessarily work out so well if the BTC price moves against anticipation (meaning down) or even fails to go up as anticipated.
The investor will be able to optimize their Bitcoin accumulation through this combined strategy as well as being able to mitigate the risks associated the market’s volatility.
One of the most inevitable dynamics in bitcoin remains its volatility, and we cannot really know its short-term direction with any kind of confidence - even if we might anticipate that in the longer term the price direction is inclined upward, we should be careful in regards to how much certainty we apply to that too.
So, I am not sure if the methods help as much with short to medium term volatility as much as position size does, and over course the methods can help us in regards to dealing with position size within the context of our other various personal circumstances...and the demand on our cash in light of our needs and/or our wants... which surely would suggest that if we are wanting to be somewhat aggressive in our bitcoin accumulation, we still have to make sure that we maintain our aggressiveness within certain boundaries that are not going to cause us to overdo it.. so the different methods should be helpful in our balancing those, which I think that I frequently suggest that the more aggressive that we want to be, then the more sure that we need to be that we are using our various tools and options to the maximum that we are able to without screwing things up.. which causes our management of our various cash cushions to be more important to monitor and maintain.
Though it’s crucial for an investor to consider and also find the right balance based on their understanding of the market as well as their personal financial circumstances, because this combined approach may consider the individual’s financial goals, market analysis and risk tolerance.
Most of my own strategies try not to get too involved into any kinds of needs to understand the market to the extent of referring to short-term bitcoin price movements, even though surely many of us, including yours truly, spend a lot of time watching the BTC price go up and down and trying to figure out if there is any kind of meaning to such movement that might potentially interfere the strength of bitcoin as an investment and bitcoin's overall tendency to go up in price... even if there might be short-to-medium term doldrums.. Yet within the formula that you mentioned, the personal financial and psychological circumstances seem the most important to figure out and really maybe we should not get too preoccupied about our psychological circumstances since if we can put good personal cashflow management into place, then it is quite likely that the psychological circumstances should mostly take care of themselves, if we are a somewhat normal person rather than potentially having our own psychological inclinations that need to be accounted in one way or another...
yet even if we might already know that we have some psychological inclinations, we should be able to figure out some way of balancing our finances in a way that at least attempts to deal with our own psychological particulars... such as whether we might need to attempt to maintain more of a cash cushion or if we might feel better if we are invested a wee bit more aggressive and working with a slightly lower cash cushion than what others might want to maintain.. which also could bring some folks back to involving themselves with shitcoins, and there could be some folks who just cannot resist getting involved in shitcoins because they want to stay busy in researching and making sure that they are not missing out on some kind of a pump that might happen in one place or another, yet there might ONLY be so much that could be done for some folks if they also are not able to limit their shitcoin/trading allocation to something relatively low such as less than 10% the size of their bitcoin holdings..
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I think you should give more importance to holding rather than expecting potential returns. Expectations of higher profits especially in Bitcoin investments can reduce the growth of Bitcoin holdings so you should focus on holding more. Also by holding long term DCA you can get a huge benefit that can increase the portfolio's growth trend over time.
These seem to be fair points in regards to anyone who might get too preoccupied with strategizing around buying dips that may or may not come, yet there can be ways that some guys might structure around DCAing and buying dips that might still end up being reasonably applied to their financial circumstances.
I don't agree to call these methods hybrids because when investing in Bitcoin you should make realistic decisions given the normal conditions like the DCA method.
It seems that any reference to "hybrid" would be the combination of methods.. so if any of the methods might be thought of in their pure form, then if they are combined, then the application of such combined method might be considered to be more of a hybrid since it is not being applied in a pure form... There are many times that we might attempt some kind of a hybrid application, yet if we know that we are doing it and we appreciate the trade offs in our application, then there is probably nothing wrong with applying our methods in any way that we might consider reasonable.
Also backup funds through which you can try to run DCA for long term and continuously and manage multiple cycles or more cycles.
You are saying this weirdly, even though what you are saying does not seem wrong.
When you see a market correction (dip) you can choose to invest your extra funds in a lump sum which will accelerate the growth of Bitcoin holdings and the possibility of having a decent portfolio before a cycle turns.
You are mixing up terms since you are talking about buying the dip, but you are using the term lump sum, which lump sum is a different strategy than buying the dip.
To reduce the potential risk in investment you should give top priority to DCA strategy which is a universal method ideal for every class of investors.
DCA is important to new investors or anyone still relatively early in their BTC accumulation stage. Once a person has accumulated a decently good size quantity of BTC, they may well choose to deviate from a strict DCA approach and to start to employ some other accumulation strategies that would incorporate buying the dip. It is not always going to be clear when someone might be justified to start to move away from a strict DCA approach, and I personally believe that many newbies get too prematurely distracted by BTC's price moves rather than just focusing on DCA for at least a whole cycle, yet these do end up being personal choices in regards to figuring out how to balance the trade-offs.. and in the end, no one on the internet is going to help out anyone in terms of their choices, so each person has to chose for himself and also to take responsibility for the consequences in regards to how much bitcoin he ends up with and those kinds of real world consequences.