You're indirectly talking about buying only dips here, newbies aren't supposed to be encouraged to buy simply because there's a presumed dip but should get started and continue buying regardless of the market price movement. For a good discipline, as long as newbies are sure they have discretionary income present,
It will never be logical to just wait for a fall. Rather, it will be a waste of time and lack of confidence. A new investor should never be encouraged to fall. Buy from the current market price, but keep the investment management consistent even through the DCA strategy.
If there is a fall while your investment is consistent, try to buy more units from prudent income.
And keep an emergency fund and backup fund along with the investment. The emergency fund will be your danger companion that will save you from sudden danger.
Follow the DCA strategy while investing in the first stage. And try to increase the portfolio slowly. This will make your investment sound and risk-free.
So after the first stage the investor should discard using the DCA method is that what you are saying? While I agree some of the things you said here, I quite find this particular statement I highlighted troublesome. As an investor, I don't think there should be a stage you should discard using the DCA method if you want to get most out of your accumulation journey. Utilise the DCA method from the beginning to the end of your accumulation phase and you will derive more value in your portfolio.
Well there's a stage you don't need DCA strategy anymore that stage is when you have reached a fuck you stage, in this stage you have already accumulated enough Bitcoin and you can even decide not to work anymore and your accumulated Bitcoin can serve as your source of income and you can use it to settle basic needs, at this stage you can only be accumulating Bitcoin when Bitcoin dips.
Apart from this stage there's no time you should stop using DCA strategy because DCA strategy is one of the best strategy for Bitcoin investment, DCA strategy helps you be consistent and fast in your accumulation journey.
Are you now saying that in the fuck you stage all you have to be doing is just taking of profit to settle your basic needs because you have gotten to your over accumulation stage you should take a break from investing and only spend? No that is not right because your investment will not be increasing but reducing, because you are not adding, then do do people even the rich still work daily to earn more more if all they have can sustain them through it their life time, this is a wrong mindset and mentality because you can end up becoming a low or not coiner within a short period of time because you are just spending and not adding up to your investment.
Using the dca strategy is good at all stages even if you have gotten to your over accumulation stage than waiting for the dip before buying, at least it will help you remain regular in accumulation, I see it as even more easier at this stage because it will be more stress less than ever, the dip might be more expensive tat your set aside funds for it.
It is advisable not to stop accumulating even if you have gotten to your over accumulation stage because you don't know what will happen next, since your basic expenses might just be outrageous at anytime .
Once a person reaches overaccumulation status then he might choose to pause any new buying, and he might have a period where he is neither buying or selling, and perhaps once he starts to withdraw, then if the dollar value of his bitcoin holdings is growing faster than his withdrawal rate then he does not need to keep buying..
Do we need to give an example?
It is optional to keep buying once a guy reaches overaccumulation status, and sure he might make mistakes and come to conclude that he is in overaccumulation status and he is not. He also might not really know what overaccumulation status is, so if he does not know, then he is also more likely to make mistakes.
I would think that if someone spends 4-10 years or longer accumulating bitcoin, he might be able to develop skills so that he is able to assess when he has reached overaccumulation status.
I would think that the more common mistakes in bitcoin are related to guys failing to accumulate enough or selling too soon or not really knowing how to manage their bitcoin holdings so that they can sustainably hang onto it, so sure I can see why guys might be nervous about making sure that they have enough bitcoin or more than enough, since guys are likely to make mistakes because they will come to believe that it is good to draw down the principle when it is probably better to withdraw in a way that is less than the rate that the bitcoin is growing in value.. and yeah, guys may also disagree about these ideas about how much bitcoin to accumulate and when they can transition into being able to sell their bitcoin.
Over accumulation is indeed a very interesting concept because it shows that an investor has at some point managed to reach their asset goals, and at this point, it is no longer necessary to continue buying more bitcoin. And it is a concept that every Investor needs to be very knowledgeable about because just as you mentioned a lot of folks find it really hard or difficult to define. What having enough should be like as it can be very subjective and also prone to mistakes. Some investors end up making the mistakes of feeling like they have actually reached a state of over accumulation and then stop accumulating bitcoin, I need to find out later on that they were wrong and then starts regretting.
If someone has been around the space for a long time, for instance, like 2 to 3 cycles of disciplined buying, then they must have not only built a solid portfolio but also a much better intuition about volatility as well as their own personal financial thresholds. At this point, it is their experience in the space that mostly hints them whether or not they’ve reached a state of overacculation or they’re simply just being overly confident about their stash. It is even possible for those who are considered to be seasoned investors to misjudge how long they’ll need to keep on accumulating or their withdrawal needs or even their growth rates.
I also like the part you mentioned that the biggest risks are usually on the front end, that’s 100% true, some folks sell off too soon, and some fail to accumulate enough or end up losing their convictions due to a sudden market downturn, but when investors have overcome these phases and have actually reached a state of over accumulation, their mentality now shifts from accumulation to preservation, it’s no longer about how to accumulate more bitcoins but more about how to make sure they withdraw strategically to avoid messing up the stability of your investment, and this is exactly where the actual discipline comes to play. You need to develop that mindset of maintaining the growth of your asset while still tapping into your bitcoin in a strategic manner.
That being said, everyone has their own various perspectives on what’s optimal, for some folks, it’s more about maximizing generational wealth, and to others, they feel it’s fair enough to enjoy what they’ve worked so hard for to build in their lifetime. And it is very normal for folks to decide how to really manage their bitcoin portfolio right after they’ve reached over accumulation because it all depends on their individual risk tolerance, their time horizon and most importantly, their overall financial goals.