We all know that there have been times where bitcoin has suffered multi-year periods of underwater performance and there’s a good chance that something like that will happen again probably in the nearest future.
You saying “forget about it for 3-4 years” is sounding like a very simple thing to do but the fact still remains that, an advice like that will only work if the person is mentally strong enough to handle watching their investment drop by 50%-80% without fretting out and do something retarded; you’d be suprised at how many of the people who think they can handle volatility when the price is going up but if for a moment the price happens to drop lower than they expected they start to shit their pants.
But even at that we still have long term investors still holding their bitcoin portfolio while, some are still using DCA to keep their bitcoin accumulation ongoing till they have reached their bitcoin target.
Provided that you have a long term investment mindset and use your discretionary income to accumulate bitcoin with the amount that wouldn't affect you financially, when there's a dip you might panic but not to the point of selling at loss.
This is why brand new investors who don't have the confidence in bitcoin should start buying with little amount from their discretionary income till when they have learned by experience due to consistent purchase and gained more confidence in Bitcoin, they can increase their DCA amount and invest aggressively to cover up for the period they were still learning and accumulating in a whimpy way
Well you’re not wrong but your reply doesn’t fully address the point i made earlier.
My point was primarily shifted towards the psychological aspect of investing.
Telling someone to invest and forget about it for 3-4years is probably a good advice but many people underestimate how emotionally difficult it can be for some people to watch their investment go through a large market drawdown without panic selling.
Your reply is primarily shifted towards the strategical aspect of investing which include investing with only discretionary income, having a long term mindset, starting small with DCA, and increasing your DCA as your conviction grows.
Now all these are very reasonable points that you have made and after reading it, i don’t think they actually refute my own earlier points. In fact i think your points indirectly support my earlier stated points.
Reason why i say so is because if we are clamoring for a beginner to start investing with small amounts until they gain more confidence before increasing it, then to me it simply implies that confidence and emotional resilience are not automatic.
In other words, a person has to develop them over time and that’s essentially what i was saying too; so we’re basically on the same page.
Building your conviction over time through experience is what helps people to be able to hold through certain drawdown periods and in most cases, without conviction, even a well planned DCA strategy can fall apart.
