Topic: Buy the DIP, and HODL! - page 75. (Read 129603 times)

That is some pretty presumptive speculation that you are making both in terms of DCA being more profitable than lump sum and also you are failing to really provide specifics.

Your presumptions are not even correct, either, or maybe you just framed them badly.

If we have two people with an equal budget, then most likely the person who front loads in a 10 year timeline or even front loads in a 4 year timeline is likely going to do better than the person who defers buying through  either DCA or buying dips, yet we cannot know, since we don't have enough details regarding when the guy bought.

We could have two or three people who might have something close to an initial starting budget, and A lump sums, yet B continues to invest into bitcoin, so that B ends up investing more and likely having a higher cost per  BTC, yet B ends up with more BTC even though they cost him more, so B would be better off than A. 

We also could have A with more money than B, so he is able to lump sum and B is not able t lump sum, and likely B is not going to catch up with A unless over the years he ends up investing more than A, and surely he would likely have higher costs per BTC too, yet we cannot even know that for sure because we cannot presume the direction of the BTC price, even though historically the BTC price has trended, up, yet we have had some extensive periods that can even last for several years that could end up allowing for BTC purchases at lower prices, which would cause the DCA'er to come out ahead of the lump summer so long as the lump summer did not also DCA but instead just invested one or two times and then if the BTC price ended up dipping from the lump sum buy amount, then the DCAer ends up buying BTC at cheaper prices. 

Not easy to know these kinds of things in advance, yet part of the reason that DCAers tend to have better outcomes than lump summers who stop investing is due the DCAers persistence that likely ends up in the DCAer investing more than the lump summer, yet with the passage of time since the BTC price tends to go up, especially if we are considering investment timelines of 4-10 years or more, then the DCAer ends up profiting from those historical BTC price dynamics that are not guaranteed to continue to occur, yet have decently good odds of continuing to occur, especially since the strength of bitcoin's investment thesis does not seem to be getting  weaker, but instead seems to be getting stronger, even if the steepness of the price slope seems to be getting less steep with the passage of time, yet even future steepness is not exactly clear, either.


There is a lot of truth that many folks do not have either an ability or a desire to lump sum invest into bitcoin or anything like that, so DCA allows for way better, reasonable and practical ways to manage cashflow in order to figure how much to invest into bitcoin each week, whether it is $100 per week, $10 per week or some other amount that they believe to be reasonably achievable and within their BTC investment aggressiveness levels.


That is true.  In order to really make progress and to take bitcoin investing seriously, it is important to keep investing regularly, which is part of the reason that I consider that buying every week would be a good thing, even though surely some folks might want to spread their investments out to be less frequent, so there is nothing wrong with their following their own preferences.


Personally, it seems to me that almost everyone has a float, whether he is a newbie investor, an experienced investor or even if he has not quite yet gotten into investing.

To me, it seems that float is the amount of money that anyone keeps on hand when they might not be sure about how all of their income and expenses are going to work out for the month, so if the person projects out his income and expenses for month in advance, he will see that there are likely certain times of the month that he has smaller amounts of extra cash and other times of the month where he just has larger amounts of cash, yet those larger amounts of cash are already somewhat dedicated for expenses when the expenses come in or come due, yet the exact amount of the expense might not exactly be known until it arrives.  The same is true for cash flows.  A person might have some regular monthly pay amounts, yet there is even variance in the pay amounts of the regular monthly pay, and there could also be some other kinds of irregular pay that a guy gets for work or for things that he might sell, so maybe there are some months that some extra pay comes in or some months that the pay is less than expected, and so the float should be enough to cover those kinds of irregularities whether the guy is an investor or not. 

Surely if a guy has more complications in his finances, he might have greater levels of float, and so he might purposefully choose to maintain higher levels of float if he already anticipates either intra-month shortages of pay and/or extra expenses.

I otherwise agree with your description of the emergency funds and reserves, and it seems that the emergency fund would be built first up to at least 3 months, but it can be simultaneously being built while still investing into bitcoin, yet once it is built at least to the minimal amount, then there can be continued building of it larger and/or building of various kinds of reserve funds, and surely the particular kinds of circumstances of an individual might affect how he might prioritize the building of various kinds of reserve funds and the extent to which he might maintain different categories within the reserve fund or just keep them all as a general category with the same priority, which seems less planned if a person is not figuring out how to prioritize his various kinds of reserve funds, yet surely not everyone is the same in regards to how much planning that they might do or how particular they might want to be when they are saving up cash for certain of their purposes.. or how long they might allow certain categories to build up and to stay in cash.. which generally tends to be a non-working category, yet folks sometimes will want their cash to be put into shorter term working categories, especially if they might be considering they they will need it 2-3 years down the road but they don't completely want to keep the value in cash for that long while they might be building it up.


I doubt that investing weekly does much to achieve any of the stuff that you are saying, except it just demonstrates a more active focus on buying bitcoin every week rather than spreading out such purchases to longer periods, and it does not even assure that you are going to get lower prices... it just allows for more activism in the BTC purchases, and some people might not want that... and so we choose our level of aggressiveness, including that some people might have a lot of other things going on in their lives and they may or may not be able to dedicate to buying bitcoin every week, so they might want to spread it out. 

Personally, I think that setting up systems to try to buy BTC every week is important, since I believe that buying BTC should be considered as an important thing - yet I can see that other people might not feel that bitcoin is at that level of importance for them and they might even be spending money for various self-improvement systems and ways to earn more money in the future and other reasons that might improve their lives better than merely buying bitcoin, so they choose a more spread out BTC investment schedule.  There are balances with these kinds of matters for sure.


Income and discretionary income are not the same thing, even though you might be describing something similar, but the concept of discretionary income is the amount of money that you have left after you account for your expenses.  It is more accurate to say that we are ONLY investing from our discretionary income rather than just presuming that two people with the same income are the same or presuming that merely if someone makes more money or less money that he is able to invest in bitcoin or not.  Sometimes people have discretionary expenses too, so if they cut some of their discretionary expenses, then they end up having greater discretionary income (more money available to buy bitcoin).  Of course a person who chooses to spend 100% of his discretionary income on buying bitcoin is likely going to end up getting himself into trouble due to miscalculation of his expenses or even sometimes realizing that he needs or wants thing, so sometimes even within discretionary income there could be things that a guy wants to be able to buy from time to time or to prepare for some extra discretionary expenses through the month like going out to eat, drink or go to a movie. and so if he has spent all of his discretionary income on bitcoin, he might create some worse existence and stress for himself and perhaps even get into a position that he ends up having to draw from his bitcoin because he did not lessen his level of BTC buying aggressiveness.
 

Yeah but still.  A more experienced investor is more likely to get used to buying BTC regularly, and also have certain systems in place in terms of how he is prioritizing various kinds of funds that he has.  New investors might still be building various systems, and so for example, a brand new investor might already have systems in place in which he tends to have 2-4 weeks of extra cash, but when he gets involved investing into bitcoin, he should come to realize that it is going to be to his own advantage to build up his back up funds to be a minimum of 3 months (which would be emergency funds), and so it could take him 6 months to a year just to get his various kinds of back up funds into a good position, so for example, if the guy earns around $2k per month, but his expenses are around $1,500 per month, then he ONLY has $500 to work with, and if he ONLY built up his emergency funds with that extra $500 per month, it would take him 9 months just to get up to $4,500 (which is 3 months expenses), and if he chooses to invest half into bitcoin and the other half into his emergency funds, it will take him 18 months to build up such emergency funds.. .that is if everything goes well and as planned.. and if there are set backs, then it could take longer to build up strong finances and cashflow management and to figure out some kind of a way to balance how funds are being used and how much funds are being kept on the side for back up funds, whether emergency funds or other kinds of reserve funds.

Maybe you should go pick up the internet and do some uncovering, dividing our income into separate phases in order to accumulate differently has nothing to do with trading. Who among does not like to accumulate Bitcoin when it is cheap, everyone does including the traders and those who tend to hold for a long period. Nothing is wrong with dividing our investment funds, during those weeks it is no doubt that we can never buy at same prices, one has to be lower and some higher but that gives the investor a better chances of accumulating quite the amount of Bitcoin.

For your instance given, what if it goes the other way around and the price drops below the initial you should have bought all at once, the market is 50/50 and you just have to go with it, either high or low.

This is not the definition of trading. The post is simply addressing different ways one can go about accumulating Bitcoin and hodl and not necessarily how to sell. As much as it does not involve buying to sell in a short time, then trading is out of the picture. Traders mostly do not use the DCA method but prefer other technical analysis method that will make them think they can catch the bottom in a bid to buy low and sell high. This is different from when an investor adopt any method of buying Bitcoin to hold for several years.

It is also important to note that the method of buying Bitcoin have little effect on the success of the investment, rather how the investment is managed is the key. Despite the entry method, as long as the investment is held across several years, there are good chances that the investment will be more successful and someone that buy to sell in a short time and probably at the sight of profits.

So let us not argue too much about what might be the best approach of buying Bitcoin rather let the focus be on what should be the best way to hold and also resist the urge to sell in a hurry.

Not debating whether a person should do monthly DCA or weekly DCA. It totally depends on the individual's preference. Sometimes the person decides how to DCA depending on his salary, if monthly salary, then monthly DCA or if weekly salary, then weekly DCA. Many times the individual calculates DCA monthly or weekly, ignoring his pay period. I think this matter should be allowed to proceed independently. But if a person asks for advice you can give him advice, in this case your advice can be to determine DCA depending on salary. Do monthly DCA for monthly salary and weekly DCA for weekly salary.

When it comes to investing I take a few different approaches to my advantage. Most people decide where to spend their salary/earnings after receiving their salary. But I take a different approach here, in this case I don't make any plans after getting paid, instead I keep spending to meet my needs. I don't have a plan from my salary, but rather let the expenses flow freely. The next month when I get paid again, I put the money left over from the previous month's salary after expenses into savings. One thing to note in this case, the salary amount should be more than your demand, otherwise you may be deprived of investment. After I receive the next month's salary, I divide the previous month's balance by 3. Add 1 out of 3 to bitcoin investment and 2 to reserve funds. I can save around 20%-30% of my earnings per month out of necessity. That way I don't have to make any sacrifices to fulfill my needs and can invest properly. Not everyone's situation is the same, so the salary must be higher than your needs to take this approach. My position is currently in very low demand and the pay is average. So for me such an approach brings relief.

If you receive salary monthly and you think by dividing the money you have set aside for your Bitcoin accumulation into weeks will earn you more Bitcoin through the hope that there will be a dip within the week were you can buy at low price then you are just a trader.
Have you thought of you dividing it and in the course of you buying weekly with the money met for the month and Bitcoin price goes up will you wait for it to come down before you buy or you will still go ahead and buy, there's no need dividing it if you receives your salary monthly because there's no difference in the monthly and weekly accumulation except you are a trader who is waiting for a dip to happen.

There are several reason someone might want to spread the investment over several weeks or months as the case may be and it is usually a case of personal preference. One notable reason I can come up with is to get filled at different price point which may result in collecting more Bitcoin with the same dollar amount. For instance, in a market that is generally in down trend, dividing the funds and spreading the investment will make you get some coins at lower prices which will result in more Bitcoins. The reverse might be the case for a market that is generally in uptrend and this comes back to personal preference even though the overall goal is to be optimally invested in Bitcoin.

I don't see much difference between monthly and weekly DCA, and the choice for which to use depends on the cashflow. For those earning monthly income like salary, going for monthly DCA is best so that as soon as the funds are received, the part for investment are immediately converted to Bitcoin and transferred to a safe wallet. On the other hand those running business and seeing money daily can go with the weekly DCA as this may resonate more with them such that at the end of the week when they balance their books, they can easily set aside the funds for their Bitcoin investment. So the cashflow play important role but there could be other factors too that may inform the choice and investor will use.

For other sources of income, it is very important to help in your investment process without obstacles, even if the monthly salary is not large, other sources of income can cover your investment, whichever way your strategy is in investing BTC, other sources of income can help a lot.

If I myself rely on a monthly salary, there may be many obstacles in accumulating bitcoin, of course, the needs of each month are sometimes different, there are always unexpected urgent needs.

What I do:
Source of income always goes into BTC purchases
Some of the remaining salary will be added to BTC accumulation so this is a little aggressive that I do to continue to be able to multiply BTC.

I see no reason dividing your your money to invest weekly since it will still amount to same figure, for example if you want to invest $100 monthly when you receive your salary you can just use it at once than dividing it and still use it to accumulate weekly, the only time you should invest weekly is if you are receiving your salary on a weekly basis and from your analysis you did talk like someone who remembers that when ever we receives our salary the first thing we should do is to remove money for the running of the house like paying of taxes, electricity, water, stocking the house with food, paying rent etc, then Discretionary income being the one lift should be used to invest in Bitcoin.
When you receive your salary monthly and you decide to remove the one for Bitcoin and then divide it so you can then be using it to invest weekly there's a high tendency that you may even use it for another thing with the hope of returning it which may never happen there by reducing your accumulation percentage for the month.

The DCA kind of investment is suitable, low income earners, middle class and the large income earners, all classes mostly prefer to DCA because of extreme convenience, it allows the investor to make proper management of funds deciding how much to allocate into purchasing Bitcoin and the percentage to allocate into a separate alternatives, maybe business or something that is likely to give back profits in a short time which will enable the investor to add up to his accumulation style.

Living on a single source of income is not bad, but not totally valid, it also depends on how much income the person gets by the end of the month or week, if the income is very high enough to sustain every vital needs and still to invest then nothing much to worry about. But, owning a second part of earning is also a good move for anyone who would love to control more funds.

Yeah I know where you are driving at, the aspect of the amount of income one earns will determine the amount of bitcoin to accumulate. Actually I was not the one that made the statement but I replied to what @Felicity_Tide said, and there is no much difference from what you are saying from mine. Discretion fund and or amount we earn from salary are not a seperate thing because without the amount someone earn from his place of work or anywhere he gets his fund from, he can't be able to have a discretion fund because there must be a place you earn money to invest in bitcoin and also have a discretion fund so both are thesame thing.

I am not explaining about old investor. I am taking an instance of a new investor who is struggling with strategy to help in managing his fund properly in other not to spend agresively. Because surely a person may be an old investors but hasn't figure out a better strategy to help him in his accumulation journey. No body wether old or new is perfect in bitcoin accumulation process. Surely a person who is interested to invest in bitcoin will be willing to learn other strategy or be able to Tweak new strategies from time to time.

That's the biggest advantage of this DCA method, anyone is capable to succeed on it as long as you know how to allocate sustainable funds so you can continue to DCA without being tempted to sell at the middle of your investment process due to financial crisis.

And for you to successfully do that, do not rely on a single source of income but find side hustles that will cover up your funds for investment. That way, you will keep buying and hodling potential coins without being pressured if you can gain quick profits or not.

Depends on the volume you can accumulate since somehow lump sum strategy may work that way especially if you could able to acquire huge volume. But if you can only spend few bucks for acquiring for monthly basis then maybe you will not get the best result what you wanted. But if this is what those people could afford and just think about they are doing a savings with bitcoin then plan to make an action in span of 4 - 10 years then maybe this is still better than nothing. For sure there would be some changes will happen on financial side and there's a chance that people could earn big then for that situation they could just adjust their purchasing power then accumulate more bigger volume. Maybe just set aside thinking about other things and focus first on building up your bitcoin portfolio. Later on once you are already gaining decent volume then by that time you can take care of other things which is important to make your life became more sustainable.

I agree successful bitcoin investing depends on how much you earn and hold. Investing only once month is not best way. Instead of this split your investments weekly to reduce risks. Divide your salary into parts. Bitcoin investment and emergency savings and family expenses. This helps you invest steadily buy bitcoin at lower prices and control spending and make wise decisions. By doing this you will maximize gains stay financially stable and accumulate bitcoin more effectively.

It is not the amount of income that you earn will determine the amount of bitcoin that you will accumulate but it is the amunt of your discretionary income that will determine the amount of bitcoin you will be able to accumulate overtime if you invest with a focused and committed mindset.

I don't understand what you mean because any old investor already have his emergency funds in place to enable him survive his bitcoin accumulation journey till date. If it is a new investor I can understand but it is impossible for a new investor without an emergency funds to split his income into those three parts that you mentioned above. Because the most important thing is for the new investor to first figure out how much is his discretionary income and how much from his discretionary income that he can use to buy bitcoin for a long that without affecting him.

The new investor can use the other part of his discretionary income for his emergency funds. He can later after he has built his emergency funds up to 3-6 months, he can divert the funds into building his reserve funds. When he has built he reserve funds, he might choose to go ahead and channel the funds of building his reserve funds to float  and invest aggressively with DCA without overdoing it.

I agree with you that the important thing in bitcoin investment is the amount of income you earn and also the amount of bitcoin you are able to accumulate from it, but the aspect of waiting to buy every month end may not be the best option or that is not a wise investment approach. For me if a person recieve salary it is not good to invest once every month but we can mitigate the opportunity by splitting it across the week. For example if a person recieve salary at the first month of resumption, he can fix on how to split his fund into the following part, 1 for bitcoin investment 2. For emergency 3. reserved fund to use for the purpose of family expenses and also for buying bitcoin every week(DCA), buy the dip and of course lump sum till the next month of his salary which is the 4th week to enable him accumulate bitcoin at ease, than investing agresively and sell later due to lack of proper planning. Sothat he can take advantage of buying the dip in some week from his reserved fund than just investing once in Bitcoin and using the remaining amount on feeding and or meceleneous expenses. 

A low income person can be successful in this way, so you don't disappoint new people in this way. I think there is no difference when it comes to investing in Bitcoin, because anyone can invest in Bitcoin. If you notice, you will definitely see that a low income person will be able to invest in Bitcoin only by using the DCA strategy. Because investing in the DCA method is possible in several ways, I see no role for frustration in this case.
 In order to invest in bitcoins, he can definitely start investing in bitcoins with the extra part of his income weekly and monthly. In this case, if he wants to invest regularly in Bitcoin like this for a few years, then he will definitely succeed because after 5 to 10 years, Bitcoin will form the largest portfolio.

Of course, it is possible and that will depend on the amount that is used to lump sum once and how much was bitcoin price when he lump sum, and how much you are using to DCA. But I must tell you that if two investors A and B invests the same amount and Mr A bought once with lump sum of $100000 and hold for 10 years, he will make little profit compare to Mr B that spread out his $100000 using DCA to buy continuously every week overtime. Mr B will be in a big profit than Mr A.

On the other hand, if there is another investor Mr C who decided to use the three method to invest in bitcoin with $100000, he uses $30k to lump sum right away, used $40k for his regular DCA weekly or monthly and use $30k to buy at the dip after10 years Mr C will have more bitcoin that the other two investors and will also be in profit

In addition DCA is used in order for you be able to manage your cash inflow because you will have a long term mindset commitment of always buying regularly every week with ease in order to grow and build a big size of bitcoin overtime. The rich can also use DCA method to buy bitcoin and it is not just that they cannot buy huge amount but it gives them more flexibility to have time for other investments.
Buying once in a month or once in every three months constantly and continously is still DCA. Everyone has to figure out when it is convenient for him to buy and the most important thing is that you keep your bitcoin accumulation ongoing overtime to keep on increasing your bitcoin stash as a new investor.

Even though the OP seem to be partially right, but I feel that there are some form of over exaggeration in his wrte up. I personally can't speak for a van driver or even a top executive, but for sure I can speak for myself. The word "Everyone" is quite misleading. If everyone finds this method the best way to accumulating Bitcoin, then what then happens to other method. You see, just as you've said, planning is a necessary criteria in making investment, in other word, you need to find your strength. And your strength is determined by how much you earn, how much you spend, and how much you are willing to DCA.

And also stating that people who do not know about this investment a far behind is also misleading. A billion can choose to make a single purchase of Bitcoin of a massive amount, and ends up making ×3000 of my entire investment in 10years to come. We shouldn't over look the importance of money (earnings), because that's what's determines how well we can accumulate. The reason why I feel the DCA method must have been emphasized on this thread is literally to give some kind of opportunities to those who earn in small amount, or to those who literally can't invest except they have big amount, or those who feel they must get a unit of Bitcoin rather than fractions, or those who just want to wait for a more convenient price that doesn't come often.

But what I have always felt that is important to everyone (no matter your class), is the income you earn. If your income is good enough (assuming a monthly income), then you can choose to buy once and wait patiently till you receive the next salary before buying again. You just have to do it in a consistent manner according to your strength. But if I am to speak for myself, knowing fully well of what I do and how I earn, then I will continue to stick to my DCA method. And I don't know about others, but for me, whenever a dip falls/happens within my DCA time, it makes me kind of happy, because for sure I will be accumulating more units than usual.

You are wrong if you think this is the truth because in the end, even though we agree that the DCA method is simpler to do, forgetting financial management is a wrong or even ridiculous act.
When we make investments, especially for the long term, there is definitely planning that must be done and it is all of course so that we can make investments without having to struggle in the economy in everyday life which in turn of course refers to the allocation that must be thought of for investment so that it does not burden you, and it can be done when we have good financial management.

That is precisely the most vital thing and must be considered from the start because in the end financial management is indeed very important and you will not be able to do anything including investing when your financial management is poor, even if it is forced, the results will not be optimal and it will make you stray on the path that should be right.

Yes, money management is an important issue in investment that cannot be ignored. The first thing that comes to investing is money. If I have a source of money then I will be able to invest and have the opportunity to do so for the long term otherwise whatever plan we make cannot be implemented. Before any investment we should focus on money management. Those who have source of money will get opportunity to invest regularly. In terms of investment, he can invest not only in DCA but also a large part of his money if he wants. However, those who want to invest on a regular basis find DCA to be the most useful strategy for the long term, he will have the opportunity to build a good portfolio of his Bitcoin investments.