Topic: Buy the DIP, and HODL! - page 144. (Read 122148 times)

If I'm getting your point correctly.
You're saying that a non-hybrid approach is a lot more preferable to a hybrid approach, but if one must decide to deploy the hybrid approach, they must first keep their finances in check.

And that the secret and key to am effective hybrid approach is finding a way to strike a balance between investment flexibility and financial discipline, by considering a framework the can be able to combine one's investment growth, one's financial stability and being overly prepared for emergencies that may possibly arise.

First building an emergency fund that'll possibly cover one's living expenses for at least 3 to 6 months as well as building other reserves funds, in a liquid and low risk asset.

Is that it, or am I still missing the point?

Maybe that is the confusion in lump summing... it is not about buying a bunch at once, but instead having the ability to buy at once because of somehow receiving extra money or coming accross extra money..

so if extra money is (or becomes) available. .some or all of that extra money can be used to buy BTC right away, or it could be plugged into DCA and/or into buying on the dip systems.

How come I feel that I am repeating myself?

Maybe it is not a BIG deal?  but there still is a difference in the practices, and guys who understand the difference are going to be advantaged.. and maybe it does not matter so much what guys do or do not do, even though maybe part of the reason that we are participate in a forum like this or a thread like this is to be able to advantage ourselves from knowledge and being able to act upon such knowledge whether we are buying BTC right away or making various plans about future buying of BTC.


For sure this is correct.


Ok.  This makes sense too.

Maybe I was just quibbling about the way you were saying it earlier.. with the seeming convolution of ideas that sometimes happens when members describe the differing ways of accumulating bitcoin.


This part seems to be described correctly too.. so maybe I just was quibbling with your opening sentence that came off as confusing and even seemingly misleading to me.


Surely I am not saying that lump sum is something to apply for dips, especially since I am saying that lump sum and buying on dips are different kinds of strategies that are based on differing reasons for doing one or the other.. the mere fact that you might buy a lot of bitcoin on a dip does not convert that buying on dip to lump sum. .since lump sum is different from buying on dips, even if a lot of members are convoluting the ideas..


Differing strategies may well end up with differing payoffs, and you gotta figure out what you want to do and live with the consequences of your own choices.  

Sure one strategy might pay off more than another strategy, and some strategies might employ gambling aspects that may or may not pay off... and also I doubt that all strategies are necessarily effective, since some strategies might be more effective than others including that some strategies might be better tailored to the personal specifics of a guy, so maybe having personal tailoring is one of the most important things, even if your portfolio might not end up performing as well as another simularly situated person who came into bitcoin at the same time.



Maybe this is the part where I am quibbling, since as soon as you say that lump summing is better (or more better) during a dip, from my point of view, you are no longer lump summing but instead you are buying the dip.  So in that sense the idea (or framework) of buying the dip as a motivation supersedes the lump summing idea. Once you have a dip and you are motivated by the dip, you are buying the dip, and it does not matter if you happen to have a lump sum amount that you happen to have set aside.

On the other hand, if you coincidentally receive some extra money, and the BTC price happens to be dipping, then you might be motivated by the fact that you got more money and you are thinking about whether to buy more BTC with it or not, and if you tell yourself that you are going to buy more BTC because the BTC price is dipping, then surely it may seem that you are motivated by buying the dip and not from the mere fact that you suddenly have more money.

Maybe we are going too much into overlapping scenarios, yet it still seems to me that sometimes we are going to hold money aside because we are waiting to buy the dip, and other times, we get the money and we are deciding what to do based on our having had received extra money, so if we receive extra money and we authorize ourselves to buy bitcoin with a certain amount of that money, there are three categories that we can place that authorized amount.. .buy the dip, DCA and/or lump sum... we can put some or all in one category or we can divide it into 2 or 3 of the categories.

If we tell ourselves.. wow.. the BTC price is already dipping, I am going to buy some BTC, the motivation might not be buying the dip as much as having had received some extra money and just deciding to buy right now with a certain amount of it.  On the other hand, if the person receives $1,200 extra and s/he decides to buy $400 right away, put $400 in buying the dip at ($100 at $65,006, $100 at $64,006, $100 at $63,006, and $100 at $62,006 -with current prices at $66,451), and then $400 to DCA with the buying of $50 per week on Tuesdays at 1pm for the next 8 weeks), then the extra money has been plugged into the three categories... so anyhow, repeatedly it just seems confusing and misleading to me to label a buying the dip act as lump summing merely because you might be buying more  than your normal amount upon a dip.. since if you are motivated by the dip or you set your dip prices, then you are still buying the dip, even if you end up being spontaneous about it rather than pre-planning the matter, yet on the other hand, if you end up receiving some amount of money that you had not expected, the mere fact that the BTC price might be dipping may not necessarily be motivated by the dipping as much as it is motivated by the receipt (or discovery) of more money.


 
Yes.. sure a beginner may well be more served by just focusing on ongoing persistent and consistent DCA... but still even a beginner might start to DCA, and then all of a sudden receive extra money and have to decide whether to buy BTC right away or to plug that new money into the three categories.  Let's say if such newbie bitcoiner has an income of around $36k per year, and the person has decided to invest $100 per week (which would amount to $5,200 invested into bitcoin after a year).. so after buying bitcoin for 1-2 months, all of a sudden such newbie received a bonus at work, or inheritance or some other surprise amount of $2,400, so the person may have had authorized such extra money to go to bitcoin and can decide to buy bitcoin right away (which would be equal to half of the already existing yearly amount) or to plug parts of that extra money into the three categories of buying the dip, DCA and lump sum (buying right away), and he could decide to put $800 into each category. .or he could decide some other variation of how to allocate (authorize) that is completely discretionary and flexible to his own wishes including his accounting for his own financial and psychological factors.


 
 Yeah.. lump summing when a dip occurs is not lump summing. .it is buying the dip;.. and if you are saving up some of your extra money in order to buy the dip with a lump sum amount, then you are still buying the dip.. and the mere fact that you have saved up a lot does not convert that into lump summing.  If you are calling buying the dip lump summing, then it seems to me that you are creating unnecessary confusion and convolution of terms.


 
Yeah of course there is nothing wrong with combining of practices including continue to DCA while you are buying the dip.. if you consider that to be a good way of going forward with your BTC accumulation.  Each of us decides what combination of methods and even how much of each to employ based on our various factors regarding discretionary income and also if we might get extra cash coming in from time to time that might create circumstances in which we might have to consider how to strategize our BTC accumulation with the use of the new money coming in  - if we are lucky enough to have such circumstances in which we might consider that we have options regarding how to do our BTC accumulation - including whether we might be taking chances or timing dips with part of our money or if we might just be buying right away that may or may not be considered DCA or lump sum depending if there might be extra money that comes in or if we might be just categorizing our funds from our regular income (or our regular amounts of discretionary income).
 

Of course the more years someone has investing into bitcoin, such person might start to feel like his options might be changing based on an  amount that he has already invested into bitcoin.. There can be changes in the feelings of being prepared for UP with persons who already have bitcoin as compared with folks who have little to no bitcoin.


Yep.. there is likely never going to be any perfect strategy that maximizes profits and all of that.. so maybe many of us are going to be better served to accumulate as many bitcoin as we can while still attempting to maintain a balance without necessarily getting too greedy... so yeah, one of the great advantage of mostly focusing on some form of DCA (whether it is strict in amount or merely strict in terms of consistency or some other way of doing it) is that there can be a good deal of focus that helps us to tailor our investment amount and our investment frequency in accordance with our own budget and other aspects of our finances and psychology.


I doubt that I am suggesting which strategy(ies) is (are) best, but that guys have to figure out which strategies is good for them based on their own situation, and surely there can be some strategies that make more sense than others. .depending on how new a person is to bitcoin and other individual factors.. so if each of us knows we could choose our strategy(ies).. so maybe some folks would be better off with strict DCA.. until they get to a certain level of BTC accumulation, but each person has to choose his own level of BTC accumulation.  

I am also suggesting a 4-10 year or longer investment timeline into bitcoin in order to call it an investment rather than trading or gambling, but in the end, guys can do what they want and call it what they want.. so in those cases there might be disagreement regarding their approach to bitcoin, even though each of us is free to figure out our strategy or combination of strategies.


I am surely not saying that... .., but I would suggest that if someone comes to bitcoin and they have a plan to invest $100 per week for 5 years, and at the same time, they lump  sum invest with something like $5k, they might also benefit by creating a buying the dip plan too, in order to supplement the lump sum that they started out with and their planned DCA practice.

I am hardly saying anything about profits even mattering in the first cycle or so of investing into bitcoin, since after 4 years or so, there might be some reassessment, including considering the extent to which the BTC buys are profitable.. but I hardly give too many shits about whether the bitcoin investment is profitable in the first 4 years or so.. even though surely it might feel better to be in profits, being in profits is not a central concern (and probably should not be) for the beginner investor during his first cycle.


I might be saying something similar to that, but really I think that DCA is a great way to manage the amount that you invest into bitcoin, especially since the DCA will come from the discretionary income, so whether the DCA amount is strict or it varies could also depend upon how much a guy's discretionary income varies and other personal choice trade offs the guy might make in regards to whether he wants to be aggressive or whimpy in regards to his bitcoin investment and also in regards to how well he has his finances in order in terms of his various backup funds and/or cash cushions.


Sure.. I probably have discussed various kinds of ways to combine strategies, but I doubt that I am suggesting that a hybrid approach is preferable to a non-hybrid approach - and surely some folks might not be in a position to take any kind of hybrid approach until they get their finances in order,. so there may well be some preferences and/or benefits to building up an emergency fund and other cash reserves prior to becoming aggressive, and then maybe my own proclamation has been that guys should attempt to be as aggressive as they are able to be without over doing it.. so the devil can be in the details regarding figuring out the extent to which someone might be being sufficiently aggressive without going too far.. and also a guy might not realize that he went too far until he has some kind of an emergency that ends up testing his own set up.

You make sense mate Bitcoin is more profitable when held for long term purpose due to it unpredictability in price, but our main concern shouldn't be on the instability of Bitcoin because that is it's nature rather we should concentrate on how we can accumulate enough Bitcoin and hodl for a longer period of time, with the help of the DCA strategy one can accumulate more Bitcoin in different price level either weekly or monthly and hodl for long it can be from the range of 4-10 years and above with your discretionary income readily available so you won't sell out your Bitcoin hodling along the line or on a short period of time.

Lump sum is a different strategy from dip buying, it’s more often to make some mistakes when accumulating but it’s best you never stop accumulating for any reason like your few examples stating after buying with huge amount during a price decline an investor can wait but, I don’t agree. An investor can use both strategy depending on their goal and financial ability because waiting is not an option mostly for newbies who have a long way to go should not see bitcoin price decline  as something they’ve been waiting for but rather an opportunity. From my perspective if an investor will stop accumulating because he/she accumulated much during the dip and they still want to wait for another decline in such case the investor is getting it wrong and why not continue with the dca but the difference is an investor can still decide to dca aggressively during the dip.

Perfectly said, as long as Bitcoin investment is concerned I think the best way to go about it is by investing a reasonable amount for long term and while investing for long term always ensure to have other source of income or emergency funds so that you don't disturb your investment. The stability of Bitcoin shouldn't be a problem or something to worry about cause Bitcoin is volatile in nature and I think everyone should focus more on accumulating Bitcoin and hold it. However, I feel targeting for the price of Bitcoin to dip or drop before investing is like a waste of time reason because sometimes the price will skyrocket from it stable point, just imagine those people that was waiting for Bitcoin to dip earlier this year before they invest, i believe they are regretting by now, i will urge everyone to start accumulating and holding so that we won't regret later.

The only reason why anyone would be confused by temporary fluctuations is when they consider Bitcoin for its short-term profits which is a very inappropriate approach or way to consider Bitcoin.

Bitcoin is a long-term investment and should be considered as one, if you're to reap the actual benefits of Bitcoin. Plus, when you consider bitcoin for its long-term trajectory, it helps you get rid of the emotional outburst that comes with temporary and short-term fluctuations of the market, whether there's a DIP in the market or an hike in the price, there'll be no form of panic as you won't be concerned with the temporary market status, and it'll also help one make calculated decisions when faced with situations like that.

Again, trying to time the market can be really tricky as one may not be able to accurately predict price movements so making a wrong choice can be quite easy, so to avoid making wrong choices while trying to predict thebnext price movement, it's more advisable to DCA through any market condition and HODL for the long-term.

We constantly see volatility in the cryptocurrency market. I have seen many times that the price of Bitcoin suddenly drops from four to five thousand dollars and then increases and doubles, maybe this is the volatility of the market. Yes that is people who invest in Bitcoin for long term don't worry about Bitcoin price going down. Rather, when they see that the price of bitcoins has fallen, they take advantage of the additional benefits and invest more bitcoins by purchasing them. Whenever an investor is worried about the fall in the price of Bitcoin, no matter how far his investment goes, the only thing in his mind is that if the price of Bitcoin has fallen, he may lose a lot of money.

Those who have these thoughts while investing may sell their investments at any time for fear of losing their money. But those who invest with the right intentions will continue to invest regardless of the volatility in the Bitcoin market until they reach their goals.

For long-term investors, Bitcoin price volatility has no effect on them. Because, no matter how volatile the price of Bitcoin is, its value is going up. While the price of Bitcoin may fluctuate temporarily, you are more likely to make a profit if you invest for the long term. In this case you can invest in DCA method. By investing in the DCA method, you will purchase Bitcoins at several prices. The average price of which will help you profit.

I am not concerned about the price stability of Bitcoin because I know it will change all the time. I'm not even worried if the Bitcoin price goes up quickly because I know I'll get my return based on what I've saved. If I can accumulate more bitcoins then I will have more profits there but as long as I can hold bitcoins I have no regrets about the price of bitcoins going up or down. Moreover, I believe in long-term holdings of Bitcoin, which makes me unlikely to get caught up in temporary price ups and downs. I think true holders of Bitcoin don't care about the price of Bitcoin.

The stability or instability of bitcoin are less concern to me as long as you are for the long-term. Investors like myself don't care about the bitcoin price stability,  rather what matters the most is believing in bitcoin potentials and growth. The main focus is on accumulating and holding for thelong-term rather than worrying about price stability. Due to its volatile in nature bitcoin can not be stable bitcoin price always fluctuate but it's long-term trends has been consistently upwards. Bitcoin's history of resilience and appreciation in value overtime provides confidence for investors, so keep your eyes on the value bitcoin provides in the long run and let the instability take care of themselves.  

Yeah for some time now Bitcoin has been moving within some zone so for now it shouldn't be considered to be stable in price, and also I no that Bitcoin is a very volatile coin but the good thing about it is that irrespective of the volatility it doesn't prevent it from going to were is intended, perhaps that's why the volatility shouldn't be regarded in terms of not being sure of the price direction, though I no that with the fluctuations of Bitcoin price now so many Young investors will actually be confused if is the right moment to keep accumulating or wait for more dip, on the contrary those are things that shouldn't be considered because for me in as much as must people are thinking that Bitcoin price could possibly drop more, I strongly believe that the price could peak any moment, so as an investor being positive is a very important key that would motivate you while you continue your Bitcoin journey.

It wouldn't be a problem if we didn't consider Bitcoin a stable asset because its volatility and rapid price fluctuations in Bitcoin are what make everyone start to place more hope in Bitcoin. And it has also been proven that several cycles or periods of price recovery occur before more significant movements occur in the market for Bitcoin. Apart from that, traders also prefer Bitcoin because they can take quick profits from daily price movements in the market rather than stable prices that they cannot take advantage of on a daily basis.

It is wrong for you to think of using your DCA money over a period of time to plan in buying at the dip. The problem with the dip is that, you cannot time the dip to know when it will come because it comes like a thief in the night. Also how will you know the bottom line of the dip. You might think that you have seen the lowest dip, and buy with your DCA funds overtime, and the price of bitcoin continues to go dipper than what you bought, and maybe stay for long.

This is why DCA is good because it makes you to continue stacking without caring about the price of bitcoin at that moment. Someone that is DCAing will have the opportunity to always buy bitcoin when the price dips to the bottom line, because he is consistent with accumulating his bitcoin often. I would not say that it is a good practice for a new beginner or a low coiner to use his money that he has set aside to DCA overtime to buy bitcoin when the price dips and keep waiting till he has recovered back before he continues with his DCA. DCA should not be stopped, because it will terminate the purpose of accumulating and growing your bitcoin portfolio faster to reach your bitcoin target.

Lump sum can be done anytime that you have the money, you just buy right away without waiting for the dip, but you should make sure that you are on your regular DCA accumulation weekly or monthly and it shoukd not be tampered with. Money that we don't need and feel it is good to put it into bitcoin is good for lump sum. For instance, you sold your car because, you don't need it anymore and not because you are broke or it is giving you problems. Such money can be used to lump sum right away since it is not part of you regular income.

It is a wrong perspective, because instead of keeping the cash waiting for the dip and the dip did not come you might use the cash for other unforeseen challenge that might arise. Also you don't need to understand the market before you can DCA, all you need to do is to know how much is your discretionary income from your cash inflow, and how much can you use from your discretionary income to buy bitcoin that will enable continue buying with that amount always, without any problem and hodli for long. If you don't have a discretionary income then you look for another means of income. So that part of your income from the second job can be used as your discretionary income.

In essence, JJG basically sughests that investing in Bitcoin would be far more successful and profitable if a hybrid strategy was used. This way, investors could: 

1. profit from the market while it's in a DIP by using the lump sum plan.

2. Average out market fluctuations through the DCA strategy and also reducing the risks associated with timing in the market.

You can be able to diversify the approach you use in your investment by employing a hybrid approach, thereby potentially mitigating the risks of losses as well as also maximizing returns. It's true that this method of investing in Bitcoin is more adaptable and may yield greater returns than depending solely on one strategy.

Boy i haven't really thought about a hybrid approach or the possibilities, I guess learning never ends, because this assertion has also opened my windows of perspection and possibilities.

Noted: while rechecking implying the word stable in the context doesn't fit in appropriately, Bitcoin price has consolidated within the price of $70k supposingly is the right choice of word.

All what JJG mean is that lump sum is also an effective approach to accumulate Bitcoin most especially during the DIPs but that shouldn't stop us to keep aside percentage of that funds to DCA, It is far better than just saving the money then waiting for the Dip before investing. In context, all strategies can be effective all in one investment setting depending on how and when it is implemented.

I know that lump summing is when an investor chooses to just buy Bitcoin at once but it doesn't mean that after buying at once that someone cannot continue to DCA in other to acquire more at different prices if they have a steady cash flow since lump sum should not be that you will offload all the money you have at that material time, you can still have some reserves to take care of sudden needs pending your next income and you can also see reasons with me that lump summing is more better during a drastic DIP even though you don't continue the DCA for sometime again so you could regain the cash that you used in lump summing at a DIP from your conspicuous income that you would have used to DCA and it now stands as a reserved funds. However, a beginner may not comprehend these various strategies at the start of their investments as they will be more focused about the DCA because it is easier and doesn't allow regular monitoring of market prices. I am not trying to complicate between lump summing, buying at a dip price and the DCA but I am more concerned about lump summing only when a dip occurs and continue to DCA some other time that is for someone who have understood the activities of the market.

Just like you said, I don't want it to look like you are making repetition of yourself however it is also important for a beginner who have spent some years DCAing to know how to split their income between buying at Dip prices, lump summing and DCA. thanks for your concise explanation jayjuangee

saying Bitcoin is stable could be kinda misleading and may not be the right choice of word to best describe Bitcoin prices or even a consolidation period because bitcoin is originally known for its volatility and its rapid price fluctuations.

When talk about Consolidation in the bitcoin market, it simply implies a period of time when the bitcoin price range are relatively narrow, but this is far from stability, it's more like a recuperation period or a pause in Bitcoin price to prepare the market for the next significant movement in bitcoin price.

The difference between lump summing and buying the dip is significant. Saving extra money to buy the dip is best described as buying the dip or timing the market, buying the dip involves seizing the opportunities when prices drop, lump summing is more about investing a larger sum of money at once. For beginners focusing on consistent DCA investing might be a safer and more straightforward approach without trying to time the market if someone is already investing through regular DCA,  holding extra money aside might not be necessary especially in their early years. However, having the freedom to take advantage of lump sum opportunities can be beneficial if extra funds become available, whether through bonuses, inheritance, or other sources. It's essential to understand the tradeoffs between sticking to a strict DCA strategy versus setting money aside for potential dip opportunities. While holding extra cash for buying the dip can be interesting, especially for those starting with lump sums or front loading, it might not be as necessary for those consistently DCAing.

You are using the term lump summing differently from me.

From my point of view, saving extra money to buy the dip may or may not be a good strategy,  and from my point of view that is not lump summing... that is buying the dip. .there is no reason to call it lump summing merely because you are saving extra money for such buying the dip opportunities, which again may or may not be a good idea... especially for beginners who likely need to focus on stacking BTC without trying to guess about when dips might or might not come.. but sure you can do what you like in terms of holding back money to buy dips that may or may not pay off better than merely just ongoingly buying in a DCA kind of style.

There are already quite a few guys here who are coming around to understanding lump sum buying is different from buying the dip, and including that we either might come across extra money when we start to invest, or we might come accross extra money for a variety of reasons.. such as bonuses from work, inheritance, win the lottery, rearrange finances and realize that you hae more money than you thought that can be used for buying bitcoin. 

If you are combining the idea of lump summing and buying the dip, you may well not know what one or the other of those is since you are not able to distinguish them.

The same is true in terms of understanding the tradeoffs involved in regards to engaging in strict DCA versus holding some money aside for buying the dip.

I am not saying not to hold money aside, but likely there is hardly any need to hold extra money aside, especially in the first few years that you might be buying BTC, especially if you are ONLY buying through DCA and you might not be front loading your investment or lump summning from the start, so guys who might lump sum or front load from the start, may well find justification to also hold some cash aside for buying the dip and/or DCA'ing... I feel that I am repeating myself with these ideas so many times described why folks might supplement early lump summing and front loading with buying the dip and DCA but it may well might not be worth it to be saving money to buy the dip for those who are engaging in regular DCAing rather than those who front load their BTC investment.. need I give an example? of some one who might DCA $100 per week, but then if that person has $6k to invest right away, maybe that person invests $3k into bitcoin in a lump sum kind of way and then splits the other $3k into 50% buying the dip and 50% DCA..

Because they are sure that many invest, and it is also certain because it is profitable. I think you are very right to do the DCA scheme for a strategy of investing in bitcoin, because that is what can be done, because the price is indeed very expensive.
Investment in bitcoin is indeed for the long term because it usually always increases every 4 years and, coincidentally, next year is the period, and it is certain that many are waiting for a situation like this.
Be prepared to be able to get results from the investment you make for a long time and, finally, it will produce. Now is the time to hold and prepare your bitcoin.