Topic: Buying the whole crypto market. Crypto Market Index? (Read 184 times)
This is amazing. I didn´t know that website. Thanks for sharing.
sorry tl;dr, but there's this
https://www.bitwiseinvestments.com/
https://www.bitwiseinvestments.com/
I have this idea, that might be used in Jet Cash investment club.
For years, my strategy as an investor in stock market is to simple buy the whole market through index funds (ETF).
This is nothing new, and it is an old strategy for stock market investors.
John Bogle wrote this book, which is a classic for anyone who has any interest in personal finances: The Little Book of Common Sense Investing. You can download it here.
John Bogle is CEO and founder of Vanguard, a trillionarie fund and one of the largest funds in the world.
This is the introduction of the book.
SUCCESSFUL INVESTING IS ALL about common sense.
As the Oracle has said, it is simple, but it is not easy. Simple arithmetic suggests, and history confirms, that the winning strategy is to own all of the nation’s publicly held businesses at very low cost. By doing so you are guaranteed to capture almost the entire return that they generate in the form of dividends and earnings growth.
The best way to implement this strategy is indeed simple: Buying a fund that holds this market portfolio, and holding it forever. Such a fund is called an index fund. The index fund is simply a basket (portfolio) that holds many, many eggs (stocks) designed to mimic the overall performance of any financial market or market sector.* Classic index funds, by definition, basically represent the entire stock market basket, not just a few scattered eggs. Such funds eliminate the risk of individual stocks, the risk of market sectors, and the risk of manager selection, with only stock market risk remaining (which is quite large enough, thank you). Index
funds make up for their short-term lack of excitement by their truly exciting long-term productivity.
"Index funds eliminate the risks of individual stocks, market sectors, and manager selection. Only stock market risk remains."
There is no such index fund in cryptocurrency community, as far as I know. A fund which would represent the Coinmarketcap index. This fund could be composed of the top5, or top10 cryptocurrencies, for example.
There are some similar initiatives, such as Coinbase Index Fund. This is a very interesting fund, however it does not contain the whole market (XRP is out, for example, which is a very good performer and have a large market share). Stellar, EOS and others are missing as well.
Even though, this Coinbase Index Fund had a performance superior to Bitcoin's performance in the last years.
One of the biggest advantages in holding the "whole market", is that your emotional is out of the equation. This is a more rational investment strategy. You cannot say "i will not buy Eth this month, it's going down so badly" or something like that. Our emotions usually are bad for our investment decisions. You will get all the pumps from big coins, such as xrp and xlm that were unexpected.
The biggest challenge in creating and managing this fund would be:
-As there is no index, such as SP 500 (top500 stocks), we would have to create it. Top 5, top10, top30?
- Manage it every month/year/week?? Coins change their positions and market shares every day.
Probably there are more challenges...
I know jet Cash is looking for small cap coins, and this might not fit his project. However, I believe this is an interesting subject and would create a nice discussion.
I tried to do something similar, just with BTC and Eth (I didn't buy much xrp, because I didn't like it at the time..) the result: eth down and xrp up. If I have bought According to market share, I would have a larger portfolio now...
For years, my strategy as an investor in stock market is to simple buy the whole market through index funds (ETF).
This is nothing new, and it is an old strategy for stock market investors.
John Bogle wrote this book, which is a classic for anyone who has any interest in personal finances: The Little Book of Common Sense Investing. You can download it here.
John Bogle is CEO and founder of Vanguard, a trillionarie fund and one of the largest funds in the world.
This is the introduction of the book.
Quote from: John C. Bogle - Little Book Of Common Sense Investing
SUCCESSFUL INVESTING IS ALL about common sense.
As the Oracle has said, it is simple, but it is not easy. Simple arithmetic suggests, and history confirms, that the winning strategy is to own all of the nation’s publicly held businesses at very low cost. By doing so you are guaranteed to capture almost the entire return that they generate in the form of dividends and earnings growth.
The best way to implement this strategy is indeed simple: Buying a fund that holds this market portfolio, and holding it forever. Such a fund is called an index fund. The index fund is simply a basket (portfolio) that holds many, many eggs (stocks) designed to mimic the overall performance of any financial market or market sector.* Classic index funds, by definition, basically represent the entire stock market basket, not just a few scattered eggs. Such funds eliminate the risk of individual stocks, the risk of market sectors, and the risk of manager selection, with only stock market risk remaining (which is quite large enough, thank you). Index
funds make up for their short-term lack of excitement by their truly exciting long-term productivity.
"Index funds eliminate the risks of individual stocks, market sectors, and manager selection. Only stock market risk remains."
There is no such index fund in cryptocurrency community, as far as I know. A fund which would represent the Coinmarketcap index. This fund could be composed of the top5, or top10 cryptocurrencies, for example.
There are some similar initiatives, such as Coinbase Index Fund. This is a very interesting fund, however it does not contain the whole market (XRP is out, for example, which is a very good performer and have a large market share). Stellar, EOS and others are missing as well.
Even though, this Coinbase Index Fund had a performance superior to Bitcoin's performance in the last years.
One of the biggest advantages in holding the "whole market", is that your emotional is out of the equation. This is a more rational investment strategy. You cannot say "i will not buy Eth this month, it's going down so badly" or something like that. Our emotions usually are bad for our investment decisions. You will get all the pumps from big coins, such as xrp and xlm that were unexpected.
The biggest challenge in creating and managing this fund would be:
-As there is no index, such as SP 500 (top500 stocks), we would have to create it. Top 5, top10, top30?
- Manage it every month/year/week?? Coins change their positions and market shares every day.
Probably there are more challenges...
I know jet Cash is looking for small cap coins, and this might not fit his project. However, I believe this is an interesting subject and would create a nice discussion.
I tried to do something similar, just with BTC and Eth (I didn't buy much xrp, because I didn't like it at the time..) the result: eth down and xrp up. If I have bought According to market share, I would have a larger portfolio now...
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