To build a good Bitcoin portfolio, in addition to buying regularly, it may be a good idea to buy a little more aggressively when the market is in dip.
In my opinion a good investment portfolio requires longer time and it is necessary to purchase Bitcoin regularly. Moreover building an investment portfolio requires a lot of patience, time and need to keep themselves steady during the market updown. As you mentioned that buying a little more aggressively when the market is a dip, it is okay but buying it aggressively may have to be considered on your financial ability.
Because the amount of money we budget for our regular Bitcoin purchases comes primarily from our disposable income, that is, from the money in our budget set aside for investments. So I think it might not be wise to aggressively invest all of your hard-earned money, as a result regular Bitcoin purchases may be temporarily halted.
To build a portfolio, you do need patience so that you don't make mistakes or rush into making decisions other than routine purchases. And if your goal is long-term, this is something you must always remember and must be planned and directed well.
I mean because the goal is long-term, planning must be done when you want to make aggressive purchases that you should have planned or prepared well in advance outside of important needs such as reserve funds and also routine purchases that you have set aside outside of those needs, so that you can make aggressive purchases at the right time when the market is down without having to change or sacrifice other important money or money that you have arranged as well as possible just for aggressive purchases and that will only mess up your plan or deviate from what you have arranged well.
And I repeat and remind you that your goal is long-term which means you have plenty of time to build a portfolio well and get to know the market or Bitcoin movement well so that you can do it very well with very thorough preparation so that everything goes well to generate extraordinary profits in the future.
You are right in saying that we need patience and income source and regular purchases to build a good investment portfolio, there are also a few other steps such as staying steady when the market is going down and staying steady when the market is going up and it is most necessary to have a long-term goal. Actually the content of my post was this: When many people see the price of Bitcoin dropping while routine purchase, they try to buy aggressively. Maybe everyone is waiting for this opportunity even purchase with reserve funds and money out of demand. My point is that if we are short of money to buy Bitcoin regularly while buying aggressively, therefore everyone should have a reserve fund.
I strongly disagree on the aspect of risk management here, we are Investors buddy, not traders, it's only traders that pay attention to risk management because they are always in the market thinking that they can outsmart the market, which is very much unlikely, but in the case of Investors like us, what's the point managing your risk when we are holding for a very long time?
Don't you know that by holding it for a very long time the risk attached to Bitcoin will be reduced to the bearest minimum since it's an asset that appreciate in value overtime, so what am trying to say is that we have no business managing our risk as a Bitcoin investor, all you should do is to invest with an amount you can do away with, and once you have a source of income and an emergency funds in place to sorts you out during emergencies, you are good to go.
And the principle of long-term holding is that you don't take short-term profits and don't sell on short-term volatility. Create a financial situation where you can hold your Bitcoin holdings for the long term without interruption and try to buy more Bitcoin at the dip price if you can afford it.
That's why you must have a source of income, an emergency funds and possibly a backup fund in place, so as to be able to develop a strong holding hands even during emergency situations that may arise in the future, with all this in place, their is nothing stopping you from holding firmly even in difficult times
Risk management principles and practices apply to both trading and investing, even though the kinds of risk management would be different under each.
For long term investing, cashflow management, investing within your discretionary income and maintaining various kinds of back up funds, such as emergency funds, reserve funds and cash floats are all practices that involve risk management and can be strengthened or weakened depending on how they are carried out.
I have divided money to three levels for living in life My income is $ 5 per day, I have divided this $ 5 into three parts. For 2 dollars for a family, 1 dollar is to deal with a natural disaster and the rest of the $ 2 is investing in Bitcoin for a long time. It made me about $ 60 in Bitcoin per monthI am investing, and one thing is easy for me to divide the life cycle into three parts. I think if every investor can adopt such a procedure, then Bitcoin's market instability will not be under any human pressure.
Bitcoin is a patience test, so you can expect any good results here. Keep an eye on the market and continue the Bitcoin investment process in accordance with the above rules so that after a long time, you may be able to qualify for a high return.
Your numbers seem a bit crazy, yet if we can assume that you are able to take care of all of your expenses with 40% of your income, and you have 20% that you are able to set aside for your emergency/back up funds and you are able to invest in bitcoin with the other 40%, then surely if you are putting 20% of your income into your emergency funds, then after 6 months, your emergency fund will equal 3 months of your monthly expenses, and you may well not need to continue to put that money into your emergency fund, even though surely, it still may be a good idea to continue to build and maintain other back up funds beside just your emergency funds.. since ideally, the emergency funds would not be touched at all absent an actual emergency.
Back up funds can be saved up for a variety of purposes.
Regarding the potential sustainability of your overall investment plan, if you were able to continue such plan for many years, then each year, the amount that you invest into bitcoin would be equal to your expenses, and so after 5 years, you would have had put the equivalent of 5 years worth of your expenses into bitcoin. So then at that point, there also may have had been bitcoin price appreciation, and also you may well need to consider the extent to which you would like to have your same income or some higher income in order to at some point start to consider the potential of living off of your bitcoin in a kind of sustainable withdrawal way... since it seems to me that even if you are able valuate your bitcoin with the 200-WMA and to reach 10 years of your income (or your anticipated expenses), then it would be possible to employ formulas to start to sustainably withdraw up to 10% of the 200 WMA cash value based on price and/or based on time.
So, for example, it is my opinion that a guy with a desire to have an income of
$80k per year, he could have a bitcoin stash amount of 17.86 and to be able to sustainably withdraw $80k per year, including accounting for changes in the cost of living (ongoing debasement of the dollar and other fiat). Although if he has the bare minimum threshold level of BTC, then he might need to consider not withdrawing too much of his principle amount as the 200-WMA of his BTC will likely continue to grow faster than his withdrawal rate, as long as the BTC price is staying at least 25% higher than the 200-WMA.
Of course, the numbers can be adjusted, so that if a person felt that he ONLY needed $8k per year to live in comfort, then right now, based on the same principles described above, he would ONLY need to have had reached and/or exceeded the accumulation of 1.786 BTC in order to reach the entry level threshold for that sustainable income level of $8k per year.
You, asarfiar, are describing a situation in which you say that you are receiving an income of ONLY $1,825 per year, and so sure it could be possible that your threshold level of BTC accumulation could be somewhere in the ballpark of 0.4465 BTC (which is 1.786 / 4).. and yeah, of course, if you proclaiming that you are currently living off of ONLy half of that amount, then you could get by with a threshold level of
0.22325 BTC, which would give a sustainable income of $1k per year or $83 per month. Of course, many of us are shooting for higher amounts of income, yet it is understandable that some folks might well be able to sustain themselves with much lower amounts of income, even though we also know that some of the bitcoin transaction fees are erratic for guys trying to transact with really small amounts of value... even though it could be possible that some of the transaction fees will evolve and/or that your local area might have options for lower transaction fees, depending on where you are at and the extent to which you might be able to transact directly with bitcoin or if you are using 3rd party services.
By the way, even at your current rate of investment into bitcoin of supposedly $2 per day, which is around $730 per year, it may still take you a while to reach 0.22325 BTC or greater, yet one of the great things about bitcoin, is that the threshold for any of us to reach fuck you status is coming down with the passage of time, at least in terms of the quantity of how many bitcoin you need in order to reach or exceed your accumulation threshold level.