Hi, clearly being an investor in anything right now is very challenging, to say the very least. We are truly living through an extra-ordinary period. Crypto currencies & blockchain technology revolutionising the financial world and the way business is conducted in the future.
The major changes to the internet that the metaverse will bring. Whilst at the same time a 2 year global pandemic, followed by a war in Europe and the knock on effects that is going to have on fuel commodities & worldwide food inflation.
Hopefully, nothing else comes along at the moment.
In today’s video I explain my take on the current situation.
In the first segment,I look at perspective. We often hear the story of “if you had only invested $1000 in Amazon at its IPO in 1997 and held them (that’s the crucial part of the sentence) you would now be a multi-millionaire.”
The statement is correct. However, unlike the arrow in the diagram below, the price did NOT go up in a straight line. In fact, it was a VERY bumpy ride.
In the early years price dropped from an initial high of around $110 per share, right back down to just over $5.
So a 95% drop a few years after its launch. How many investors would have been willing to stomach that kind of drop?
There were then numerous +50% drops in the following 20 years.
The most recent drop of -45% of one of the most successful companies on the planet (which may have further to fall) is further testimony to the fact that crypto is not alone.
Gold: I experienced a similar journey with gold.
I invested $10,000 in 2001 when it was at $380.
I then watched it drop 15% and take over a year to get back to my initial buying price.
After the 2008/2009 crash, it peaked at a $1000.
Had I stayed in all the way? No. There were many pullbacks along the way- see the video.
Bitcoin is following a similar pattern- watch the video to see how close it is following Amazon’s trajectory in the early years!
Similarly, successful investors, especially those who put money into a revolutionary technology need strong stomachs. This is why since the beginning of this crypto journey I have stressed the importance of only risking money you can afford to lose & take profits periodically.
In times of crisis, gold has always been the ultimate safe haven. At the moment that does not appear to be the case, but if things get worse economically I feel it’s a good place to have some cash allocated.
This year I have also been converting €uros & Gbp into $USD as a hedge.
I have been longing the $ via forex trades.
This is the first part of a video update that I posted for members of my crypto website.
The rest of the content is only for them. It would not be fair to share it here, but I went on to discuss how I was investing in gold and other metals (mainly via mining stocks). Which conventional stocks I have taken small positions in, like Amazon I bought a few late last week (at a price I pointed out at FMP in a live session 6 months ago).
DO I think stocks have hit a bottom yet? Probably not! But by taking small bites at each drop I hope to cost average in. Stocks are not a big part of my portfolio and the ones I do buy are generally with a multi year timeframe in mind.
As I show in video and the notes above, its imperative to only risk money you can afford to lose and have a strong stomach and be able to not stress in the down periods.
Finally to reinforce my stance. I NEVER use leverage on anything apart from forex.
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