There investors that may not want to go in all at once, they may decide to keep some percentage of there discretionary income and them use the remaining percentage for buying the dip. As per being a low coiner ,
As you said, you can decide to buy dips. No one knows when the market price will dip and when it will be high.
Therefore, it is believed that buying through the DCA strategy without allocating some percentage of your discretionary income for dips will be the best option.
I agree with you, but your way of saying these matters is confusing…which in essence you got the idea right, which is just because we do not know if or whether dips will happen, that does not mean that it is a good idea to hold back value for buying dips that could have had otherwise been used to just buy bitcoin regularly.
At the end of the day and investor might not use all of his discretionary income to purchase bitcoin, let's suppose an investor already has around 5 months worth of emergency fund saved up so building an emergency fund is no longer part of their budget on how to spend their discretionary income, the investor could decide to invest as aggressively as 80% of his discretionary income into bitcoin but that begs the question of what to do with the remaining 20%, should that be saved up for buying the DIP? or should all 100% have been poured into bitcoin investment instead, you could decide to save for the dip but what is your guarantee that a dip will be happening any time soon, the point is that no one can really tell when a dip will happen so waiting for it becomes problematic, instead just keep investing with the DCA
Yes, you can also save for dips. But you don't know when the time for that dip will come. Therefore, it would be wise to buy more and more regularly through the DCA strategy without allocating money for dips.
It would be better to buy regularly without waiting for dips and to maintain discipline in your investment in a sustainable and stronger way.
Ultimately you got it correct.. especially for newbies.. You since it can take a long time to just build up a bitcoin holdings, so it likely is better to focus on one’s own capacities, such as finances and how much can be put into bitcoin on a regular basis (such as weekly) rather than trying to figure out whether or not a dip might happen.
This is especially true for newbies, there is little to no point in worrying about a dip happening or not when you can just keep accumulating, bitcoin accumulation takes time and the only way to be successful in it is through consistency and you cannot be consistent if you are worrying about when a DIP is going to happen and whether or not to wait and buy that DIP when it happens which is not even a certainty since we don't even know if a dip will be happening any time soon.
So instead of waiting, a newbie should concentrate on building up their holdings above anything else, it's best to concentrate on this for at least one cycle at which time the investor would have had a reasonable bitcoin stash to his name.
There is a difference between when you have gone far and when you have reach overaccumulation stage and scraping some profit when you have not reach your overaccumulation stage is a bad idea and if you scrape out profit when your investment is not up to 4 years of holding you can be seen as a short term investors otherwise known as a trader. An investor always hold for long and never think of the profit untill they get to overaccumulation and we should not invest with so much attention to have profit because we can be dismay if the price went in opposite directions (Dip).
I get your point, but I don’t fully agree. Overaccumulation isn’t really a fixed stage, because everyone’s financial situation and risk tolerance are different. Some people might take profit earlier without it meaning they’re traders, it could just be part of their personal strategy. Holding long term is solid, but labeling anyone who takes profit before 4 years as a trader seems too rigid. Even long term investors sometimes adjust when circumstances change.
What can be considered as Over-accumulation is dependent on the investor since your financial standing can play a role is deciding what can be considered as having enough or more than enough bitcoin, but taking profit from your stash to early diminishes your status as an investor, an investor reason for taking out profit can be dependent on certain factors, it could be that the investor had a stipulated period of time in which he planned to invest for and when this time runs out they can decide to take profit from their bitcoin stash, it could also be value based or price based where they what to have a particular amount of bitcoin first or a value around a particular price range after which they can also decide to cash out on some profit, but the fundamental of these factors is that the investor had everything planned out from the beginning, this is why you have an emergency fund so that you don't ever have to take profit from your bitcoin earlier than initially planned, when you start derailing from your original investment plan you start losing you consistency as an investor which can ultimately lead to you falling into the classification of a trader, this is why you take measures to secure your investment so that you don't have to sell too early.