Let's get the disclaimer out of the way, none of what I'm about to say is financial advice.
Best Practices
Should you buy the dip? What about dollar cost averaging? How much do I need to set aside as dry powder?
Forbes suggests you should hold no more than 10% of money earmarked for investing in reserve, while this Motley Fool article recommends 10-20%. These articles also rightly point out that buying the dip is attempting to time the market which is commonly thought to be a fools errand, a prescient point indeed. However, if you believe in an asset, why not buy more of it when it goes on sale?
I personally like to set aside a small amount of money in PAXG every time I put money in the market. I think of my strategy as enhanced dollar cost averaging. In the stock market and crypto I'm a huge fan of income investing despite the tax costs. This could be another source of funds to buy the dip.
Historic Lows can Mean Historic Gains
Sir John Marks Templeton Is considered one of the greatest investors of the 20th century. During the great depression Templeton purchased $10,400 of the cheapest stocks on the market, that's approximately $180,000 in today's money! He quadrupled that investment in four years.
The volatility in crypto has made a lot of millionaires. You could easily see 4x-100x returns by finding projects that create value. You need to look no further than YFI to find an example of value creation leading to huge gains. YFI is a token Yearn Finance pays to liquidity providers. The token once rivaled and even surpassed BTC in price hitting $82,000 at one point. POLYCUB and CUB token is looking pretty attractive from this perspective. @belemo has a good write up about it here
Buy and HODL
In the crypto space the investors with the highest net worth are those that got in at the lowest prices and never sold. This could be an even more important strategy as we are facing unusually high levels of inflation. That being said, as an income investor at heart I will be taking some profits over to Polycub.
Let's have a discussion, comment below!
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