When you put all your money into one investment, you are completely depending on the success of that single company.
To me it makes more sense if you spread the risk. Different companies, different economy fields, maybe even different currencies.
I think it is very important that every investor has some kind of safe backup plan from the start, in case something goes not as expected.
Topic: One Reason not to be "All Inn" on any Single Investment for Long - page 3. (Read 3778 times)
April 20, 2017, 08:23:02 AM
April 20, 2017, 08:01:13 AM
I totally agree with OP about not going All In when it comes to investment, no one knows what may happen next in this world, Even with a insanely lucrative investment opportunity its never a good idea, Emergencies happens when you may need money, are you going to borrow and cover the expenses, really not advisable at all.
April 20, 2017, 03:42:12 AM
yes you are absolutely right that we should not go for all inn in a single investment.there are so much risk that we may loose all the money in a single go,well on the other side we can say that we can say if you earn money through bitcoins,then i would say that you will never be in loss as it only about profit.
April 20, 2017, 03:14:38 AM
Diversifying the funds into different investment schemes is good than risking in the name of a single investment. Reason is that when diversified, if we experience loss in one form of investment we can make modifications in the next to compensate the loss happened. This is not possible with a single investment, because lost is lost.
But most of the people here dont have more than BTC1 to their name. How would it be a good idea to diversify the little funds you have for investing? Its like youre investing not to lose. What you should be doing is to take the higher risk/reward investment since the small funds you have is easily expendable.
April 19, 2017, 04:59:59 AM
Diversifying the funds into different investment schemes is good than risking in the name of a single investment. Reason is that when diversified, if we experience loss in one form of investment we can make modifications in the next to compensate the loss happened. This is not possible with a single investment, because lost is lost.
April 19, 2017, 04:30:49 AM
One of the best financial tips I ever received from my parents was that you should always have extra on hand for emergencies, and never take any opportunity as something to go all-in with. This applied to everything they did, and they managed to do well so I guess their strategy worked out for them.
I've never gone all-in on an investment and I probably never will, and chances are I'll be better off because of it.
Emergency funds is not a type of Investment for your information. As in the word itself it is some kind of fund that is use for emergency purposes, also it does not grow overtime like any other investments do. Also you really don't diversify anuthing if you are allocating money from one investment and an emergency fund because you just minimize your money for the investment you have. I've never gone all-in on an investment and I probably never will, and chances are I'll be better off because of it.
April 19, 2017, 04:14:17 AM
Investing all in on any single investment for long is a very risks thing to do. It might close in the long run and you will lose your money that you invest with. We have saying that dont put all your eggs in one basket, we cant predict what will happen in the next. So might join in other investment not just once.
April 19, 2017, 03:04:34 AM
It depends. If youre a person who doesnt have enough money to make diversifying make sense then going all in in one stock or one altcoin and hope for the best is your only ticket out and create a meaningful amount in your life.
Huh I think that people should have money and then do research and have at least 2 or 3 investments.
If you have only money to invest in one place, I suggest you do not knife it, wait until you have the money to make 2 or more investments.
If you think your investments can wait, then thats ok. But what if the train is leaving? For some situations it would be better to take the risk now than doing nothing. Life is short and much of it shouldnt be spent waiting around in order to be safe. If the risk is only money, go for it.
Then you too are kidding me if you intend to make real money from a small amount and want to go slow because you are afraid to lose it. If you dont have access to enough money to wait out an investment then you are not in a position to make enough money to make it worthwhile.
April 15, 2017, 11:20:00 AM
Diversification is an old and well-tested strategy when one is into investing money or assets. There are now many assets where we can invest in and that, of course, include the digital asset we know as Bitcoin as well as hundreds of altcoins if you care. Diversify, diversify and diversify. It is all a matter how you diversify or what are the assets that should be included in your basket. It is not good to only go for Bitcoin, of course. In the end, cash will always be the king as it is the most liquid of them all.
April 15, 2017, 11:05:37 AM
One of the best financial tips I ever received from my parents was that you should always have extra on hand for emergencies, and never take any opportunity as something to go all-in with. This applied to everything they did, and they managed to do well so I guess their strategy worked out for them.
I've never gone all-in on an investment and I probably never will, and chances are I'll be better off because of it.
I've never gone all-in on an investment and I probably never will, and chances are I'll be better off because of it.
April 15, 2017, 10:47:52 AM
It depends. If youre a person who doesnt have enough money to make diversifying make sense then going all in in one stock or one altcoin and hope for the best is your only ticket out and create a meaningful amount in your life.
Huh I think that people should have money and then do research and have at least 2 or 3 investments.
If you have only money to invest in one place, I suggest you do not knife it, wait until you have the money to make 2 or more investments.
If you think your investments can wait, then thats ok. But what if the train is leaving? For some situations it would be better to take the risk now than doing nothing. Life is short and much of it shouldnt be spent waiting around in order to be safe. If the risk is only money, go for it.
April 15, 2017, 10:22:05 AM
The main reason not to put your money in one investment Is to prevent the loss of your money once. When you lose of it in one investment only it will hard for you to recover it back not like you have other kind of investment you still have more chances to get it back.
April 15, 2017, 09:41:51 AM
Well I think the only way to get rich is to be all in in an investment since the beginning. For example, imagine if you were all not even in bitcoin but in an altcoin like DASH, XMR, PIVX... you would be rich already.
The problem is all those alts are now past 1 dollar.
How do we find the next coin to hold long term that pumps big and makes us rich?
The problem is all those alts are now past 1 dollar.
How do we find the next coin to hold long term that pumps big and makes us rich?
April 15, 2017, 08:28:41 AM
It depends. If youre a person who doesnt have enough money to make diversifying make sense then going all in in one stock or one altcoin and hope for the best is your only ticket out and create a meaningful amount in your life.
Huh I think that people should have money and then do research and have at least 2 or 3 investments.
If you have only money to invest in one place, I suggest you do not knife it, wait until you have the money to make 2 or more investments.
If you think your investments can wait, then thats ok. But what if the train is leaving? For some situations it would be better to take the risk now than doing nothing. Life is short and much of it shouldnt be spent waiting around in order to be safe. If the risk is only money, go for it.
If it is 10$ it is obvious that nobody will be afraid of the risk, but in the moment you risk 100,000$ it is totally different thing.
That is why diversification is a very important factor to consider when making any investment.
If your bankroll is 10,000$ total, it is a wise idea to invest 500$ in some currency pair, while having about 5000$ in some steady income investment, which will at least cover up the losses from the 500$ investment.
But it is not a very good idea to get into too many assets, especially as a new trader.
Try to keep everything as simple as possible, and hop in only when you are sure about your decision.
Please check the post history. The conversation came to be because I said that its possible that not all have enough money saved to make diversified investments. Meaning its limited and small.
"Only money" would depend on your financial situation. But the idea is an amount that can be easily replaceable by you in case you lose all of it.
April 14, 2017, 08:52:59 PM
...
I have long written that diversification is a very smart idea. No one can predict the future, etc. But discussed below is another reason not be 100% in ANY investment, at least for long. I ran into this argument at a gold blog.
Imagine that you are 100% invested, "All Inn", in gold. Even if the price of gold were to go way up, there is still a big risk that many don't see. Namely what happens if there is a big price drop JUST when the owner might NEED to sell (eg, an unexpected emergency). If our imaginary friend bought in at $1275 gold (approx. price today), and then price drops to $900 (Martin Armstrong predicts a sharp price drop like this, prior to a big price rise, a "slingshot" price rise after its initial drop).
And then, just at a bad time for the gold owner, he might need money (US dollars) to cover an unexpected $200,000 medical bill. And he if forced to sell his gold at a 25% loss to cover his bills... Ouch! It would hurt even more should gold then go to $2500 per ounce.
So, it is unwise to be All Inn on gold, even if we were to be very sure that $2500 gold is coming.
The above scenario would hold for Bitcoin as well, or anything else to be held long-term.
Some of us gold owners have a saying: "Protect the precious." That means keep some powder dry (CA$H on hand) for the unexpected.
I have long written that diversification is a very smart idea. No one can predict the future, etc. But discussed below is another reason not be 100% in ANY investment, at least for long. I ran into this argument at a gold blog.
Imagine that you are 100% invested, "All Inn", in gold. Even if the price of gold were to go way up, there is still a big risk that many don't see. Namely what happens if there is a big price drop JUST when the owner might NEED to sell (eg, an unexpected emergency). If our imaginary friend bought in at $1275 gold (approx. price today), and then price drops to $900 (Martin Armstrong predicts a sharp price drop like this, prior to a big price rise, a "slingshot" price rise after its initial drop).
And then, just at a bad time for the gold owner, he might need money (US dollars) to cover an unexpected $200,000 medical bill. And he if forced to sell his gold at a 25% loss to cover his bills... Ouch! It would hurt even more should gold then go to $2500 per ounce.
So, it is unwise to be All Inn on gold, even if we were to be very sure that $2500 gold is coming.
The above scenario would hold for Bitcoin as well, or anything else to be held long-term.
Some of us gold owners have a saying: "Protect the precious." That means keep some powder dry (CA$H on hand) for the unexpected.
I pretty much agree with the last sentence, it's better to have some cash on hand always. But I have in mind a scenario which probably could put into question the logic of all the above.
Say you've invested in two things, gold and Bitcoin. And now you urgently need money. How can you know for sure which of them to sell? Say this happened in April 2013 when Bitcoin hit all times high $250 at the moment, and gold just dropped from 1,780 USD/oz in October 2012 to 1,430 USD/oz in April 2013. Wouldn't you think then that it's better to sell Bitcoin while it's on its peak and hold gold because it has been seeing better times? But as we all know gold has dropped since to 1,287 USD/oz, and Bitcoin has risen big time
There are a lot of factors at play here
First, it depends on the liquidity of the asset, i.e. how fast you can convert it to fiat in case of emergency. Obviously, with Bitcoin it is a matter of a few minutes in most cases, though in some specific cases you can just take your gold and bring it to a pawnshop, thus getting cash that you may need so urgently. Further, the price movements won't be relevant if you are really in an urgent need for money, so you will just act in the direction which is most effective and efficient at reaching your end, but the specifics will obviously vary greatly depending on your situation
deisik and Betwrong are closest to the actual point I originally was trying to make.
I have long written positively about the benefits of diversification.
The "One Reason..." (thread title) is with holding just one asset that fluctuates in price, you expose yourself to a BIG RISK, an involuntary liquidation of the asset if two things go wrong:
-- You have an unexpected emergency, for example, where you need to raise LOTS of cash (medical emergency, bailing your brother-in-law out of jail, etc.), cash that you do not have lying around because ALL of your money is just in gold (or Bitcoin).
and
-- Your asset may indeed likely will go very high in price in the future (which I believe will happen with both BTC and gold), but their prices can have big swings down too. And if a sharp price drop happens AND the unexpected emergency comes up, you would be forced to liquidate some (or more) of your investment at that low price... Only to watch that price shoot for the moon later on...
"Protect the precious" <=== Keep some cash around because you never know. No one knows what will happen. NO ONE.
* * *
deisik has a useful comment that I bolded above in red, if you have two or more assets to cash in.
April 14, 2017, 12:26:59 PM
...
I have long written that diversification is a very smart idea. No one can predict the future, etc. But discussed below is another reason not be 100% in ANY investment, at least for long. I ran into this argument at a gold blog.
Imagine that you are 100% invested, "All Inn", in gold. Even if the price of gold were to go way up, there is still a big risk that many don't see. Namely what happens if there is a big price drop JUST when the owner might NEED to sell (eg, an unexpected emergency). If our imaginary friend bought in at $1275 gold (approx. price today), and then price drops to $900 (Martin Armstrong predicts a sharp price drop like this, prior to a big price rise, a "slingshot" price rise after its initial drop).
And then, just at a bad time for the gold owner, he might need money (US dollars) to cover an unexpected $200,000 medical bill. And he if forced to sell his gold at a 25% loss to cover his bills... Ouch! It would hurt even more should gold then go to $2500 per ounce.
So, it is unwise to be All Inn on gold, even if we were to be very sure that $2500 gold is coming.
The above scenario would hold for Bitcoin as well, or anything else to be held long-term.
Some of us gold owners have a saying: "Protect the precious." That means keep some powder dry (CA$H on hand) for the unexpected.
I have long written that diversification is a very smart idea. No one can predict the future, etc. But discussed below is another reason not be 100% in ANY investment, at least for long. I ran into this argument at a gold blog.
Imagine that you are 100% invested, "All Inn", in gold. Even if the price of gold were to go way up, there is still a big risk that many don't see. Namely what happens if there is a big price drop JUST when the owner might NEED to sell (eg, an unexpected emergency). If our imaginary friend bought in at $1275 gold (approx. price today), and then price drops to $900 (Martin Armstrong predicts a sharp price drop like this, prior to a big price rise, a "slingshot" price rise after its initial drop).
And then, just at a bad time for the gold owner, he might need money (US dollars) to cover an unexpected $200,000 medical bill. And he if forced to sell his gold at a 25% loss to cover his bills... Ouch! It would hurt even more should gold then go to $2500 per ounce.
So, it is unwise to be All Inn on gold, even if we were to be very sure that $2500 gold is coming.
The above scenario would hold for Bitcoin as well, or anything else to be held long-term.
Some of us gold owners have a saying: "Protect the precious." That means keep some powder dry (CA$H on hand) for the unexpected.
Oh, I thought I would get something fresh in my plate. But you killed my expectations by giving me similar dish with somehow different recipe.
Well, yes. It is obvious. Diversification or Portfolio building is first lesson in investment world. This is done to ensure maximum gain from high-yielding securities like Gold as well at the same time to remove contingencies of unexpected losses by investment in debt securities.
April 14, 2017, 11:16:51 AM
Go all in on one if it is Bitcoin. Thats why we are all here on this site, no?
April 14, 2017, 11:08:30 AM
Well one thing is for sure that you are afraid of what you are investing in. Can you imagine the opportunity that will be lost if you have diversified your portfolio? Don't get me wrong on this one but if you spread your money to a lot of investment you just lessen the risk but did not maximize your profit also you added a lot of things to be manage by you. I still believe that you can always go " all in" in the investments you are sure will pay you the most. Just my two cents.
It is a proven point statistically and economically that diversification is much safer than all your investment in one thing. It may seem like you are missing out on the high gain you get from risky investment but in the long run the risky investments do not pay back as often as the safe ones and you end up having less money than if you had all your money in separate investments. Although in the short run you don’t see amazing profits in the long run you earn much more.
April 14, 2017, 09:56:07 AM
...
I have long written that diversification is a very smart idea. No one can predict the future, etc. But discussed below is another reason not be 100% in ANY investment, at least for long. I ran into this argument at a gold blog.
Imagine that you are 100% invested, "All Inn", in gold. Even if the price of gold were to go way up, there is still a big risk that many don't see. Namely what happens if there is a big price drop JUST when the owner might NEED to sell (eg, an unexpected emergency). If our imaginary friend bought in at $1275 gold (approx. price today), and then price drops to $900 (Martin Armstrong predicts a sharp price drop like this, prior to a big price rise, a "slingshot" price rise after its initial drop).
And then, just at a bad time for the gold owner, he might need money (US dollars) to cover an unexpected $200,000 medical bill. And he if forced to sell his gold at a 25% loss to cover his bills... Ouch! It would hurt even more should gold then go to $2500 per ounce.
So, it is unwise to be All Inn on gold, even if we were to be very sure that $2500 gold is coming.
The above scenario would hold for Bitcoin as well, or anything else to be held long-term.
Some of us gold owners have a saying: "Protect the precious." That means keep some powder dry (CA$H on hand) for the unexpected.
I have long written that diversification is a very smart idea. No one can predict the future, etc. But discussed below is another reason not be 100% in ANY investment, at least for long. I ran into this argument at a gold blog.
Imagine that you are 100% invested, "All Inn", in gold. Even if the price of gold were to go way up, there is still a big risk that many don't see. Namely what happens if there is a big price drop JUST when the owner might NEED to sell (eg, an unexpected emergency). If our imaginary friend bought in at $1275 gold (approx. price today), and then price drops to $900 (Martin Armstrong predicts a sharp price drop like this, prior to a big price rise, a "slingshot" price rise after its initial drop).
And then, just at a bad time for the gold owner, he might need money (US dollars) to cover an unexpected $200,000 medical bill. And he if forced to sell his gold at a 25% loss to cover his bills... Ouch! It would hurt even more should gold then go to $2500 per ounce.
So, it is unwise to be All Inn on gold, even if we were to be very sure that $2500 gold is coming.
The above scenario would hold for Bitcoin as well, or anything else to be held long-term.
Some of us gold owners have a saying: "Protect the precious." That means keep some powder dry (CA$H on hand) for the unexpected.
I pretty much agree with the last sentence, it's better to have some cash on hand always. But I have in mind a scenario which probably could put into question the logic of all the above.
Say you've invested in two things, gold and Bitcoin. And now you urgently need money. How can you know for sure which of them to sell? Say this happened in April 2013 when Bitcoin hit all times high $250 at the moment, and gold just dropped from 1,780 USD/oz in October 2012 to 1,430 USD/oz in April 2013. Wouldn't you think then that it's better to sell Bitcoin while it's on its peak and hold gold because it has been seeing better times? But as we all know gold has dropped since to 1,287 USD/oz, and Bitcoin has risen big time
There are a lot of factors at play here
First, it depends on the liquidity of the asset, i.e. how fast you can convert it to fiat in case of emergency. Obviously, with Bitcoin it is a matter of a few minutes in most cases, though in some specific cases you can just take your gold and bring it to a pawnshop, thus getting cash that you may need so urgently. Further, the price movements won't be relevant if you are really in an urgent need for money, so you will just act in the direction which is most effective and efficient at reaching your end, but the specifics will obviously vary greatly depending on your situation
April 14, 2017, 06:47:49 AM
my strategy rely on diversification but only for very cheap coins and in any case not a big amount(33%), that can return a great investment, the remaining amount, is with the strongest coins, and usually only 3 at best no more
too much diversification can lead to more danger and loss of capitalizzation than actual more possible profit, especially in crypto where only 1 out of 100 coins is lucky enough to give you a good return of investment
3 Diversification would be the best range and more than enough on that number would really be hard already unless if you do still have some spare cash or money to invest on then its sky on the limit but better to focus on few things so that you wont able to confuse your mind later on regarding on your investments.Going all in is not really advisable even you do know that you are sure on your decisions because going all in is very risky not only on trading but all other stuffs. too much diversification can lead to more danger and loss of capitalizzation than actual more possible profit, especially in crypto where only 1 out of 100 coins is lucky enough to give you a good return of investment
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