The current price is looking sooo tempting
Should I go full in now, or wait for another dip? Or be rational and buy in 2-3-4 portions?
This is the question!
Wait. For sure.
Perhaps wait for sub $3k.
Why would you want to buy now? There has ONLY been less than a 50% correction from the $13,880 local high.
Actually, I am
all in in terms of life savings, but not in terms of networth, since I don't have a bank loan and I own my place and a car. Now I am tempted to take a loan from the bank guaranteed only by my state job salary and not by mortgage or anything like this. I've been playing various scenarios because a bank loan is a risky thing. What I've come
to as a solution is to take one loan to buy at the current levels with monthly payments for 10 years equal to 1/6 of my salary. The annual interest is 5%, so at the end is slightly above 25% for the whole period. I can't risk all money at once, since the price can fall to 3K. If this happens I can double the loan. I still have my cold stash which would be 3x-4x bigger than the loan and is an insurance against a theoretical job loss. I suppose the risk is not too big, since my state job is with an ulimited contract. My motive is not some greed for a quick profit, but rather to reach an amount in bitcoins which I had in my mind. I tried to reach it but I failed for various reasons. And most probably I won't reach it, because max 1 year after the halving the price will stay higher than 10K. If you want to encourage me (or not) go ahead, every opinion will be appreciated!
I am not against loans or anything like that, but it is good to have all your finances in order.
Dollar cost averaging is a proven method that works in the long run. You should be trying the easier methods before more complicated leveraging matters, but in the end the choice is yours, and you need to figure your whole situation.
I started buying BTC in 2013 at the top of the then cycle, and I had an initial budget for six months and then after six months I extended it. Pretty much by the end of the year I had reached my target, but the BTC price dynamics are surely different now as compared with late 2013, yet you still should be considering a budget and a methodology that works for you and does not put you in any stress position while preparing for the price to go in either direction.
What i usually suggest is that if someone wants to establish a stake in BTC that they establish an initial budget that accounts for money available now and future cash flow. If you have $6k available now and you have $6k that is going to be available for BTC investment through your cashflow over the next 6 months, then you can pretty much assure that you have a $12k budget over the next 6 months.
You can divide the $6k that is available now into three parts. $2k each. 1/3 invest immediately, 1/3 schedule to buy on BTC price dips and 1/3 to dollar cost average over the next 6 months. As your $6k of additional income that is allocated for BTC comes in the next 6 months, you can do the same. Buy 1/3 right away 1/3 to your buying on dips stash and 1/3 towards your DCA plan over the next 6 months.
Of course, no matter what you do, you should make sure that you have a sufficient cash flow to cover your expenses and even an emergency fund. Depending on how complex are the expenses of your life, you should minimally plan out 6 months, but if youhave a lot of various expenses (or even a business or uncertainties from some of your income sources) then you might want to plan out 18 months to 2 years in advance, just to make sure that you are covered based on anticipated incomes (sure sources and less sure sources, always planning for worser case scenarios). You don't want to get stuck having to cash out any part of your BTC that is at a time that is NOT completely of your own choosing, which goes to the principle of not investing more than you can afford to lose (in that regard you are never emotionally attached to the direction of the price because you have already reasoned through why you are investing into BTC).
So finally, your investment into BTC should be specifically tailored to yourself which involves considerations of your cash flow, your other investments, your timeline, your view of BTC as compared with other investments, your risk tolerance and the amount time and skills you have available to manage your BTC fund and research further so that you can tweak your plan from time to time, as needed.
