The Stock Market, Investments, and Investing Thread
(08-15-2019, 08:24 PM)JayJuanGee Wrote: [1]Anyhow, almost any kind of aberrations can happen in one month, and you have a story that you would like to tell about bitcoin not being a good investment, so it seems.  No? ...

[2]If you are so smart about the current market status of various asset classes, what are your recommendations regarding current allocations, in order to see performance of your portfolio one or two years down the road?    With those four asset classes, how are you going to allocate?  Tell us.  How much in each?  

Let's hypothesize a $12k budget with $6k that is available to spend now, and $6k cashflow over the next 6 months?   How are you going to invest your budget?


How are you going to propose allocate those hypothetical funds?  [3]You going to put ethereum into the mix, since you had been so hot and heavy about ethereum [scam] projects in recent times?  You did not mention Ethereum, above.  Is that going to be included in your investment allocation recommendations?

[1] Not really. I think Bitcoin is alright and better than most cryptos, especially in the short-term to next 3 or so years. Its store of value narrative as an investment case could really catch on and soon find favor with institutional investors. But I still think it's pretty risky, and if I'm going to take on the risk, I'd rather invest in other coins that could multiply even more as the space matures and when the next hype wave comes.

[2] Where did I indicate I knew anything about the current market or where it was going...? I'm observing what's happening right now at this moment. I don't know what the hell is going to happen.

I also won't tell anyone what to do -- everyone has to decide that on their own based on their own risk tolerance. For someone who took a lot of risk with their company and sold it for a lot and needs to put kids through school, short-term bonds may be okay. For someone with a steady job and a steady income, maybe a little more risk with equities and crypto is alright. For someone with a lot of capital or a windfall, maybe more real estate or a hedge fund.

Life circumstances and risk tolerance are highly individual. Personally, I wouldn't want to stomach a 40% drop in my overall portfolio, but in 2008, many did. Those who held on have been rewarded handsomely, but I think that's easier said than done.

For that reason, it's helped me to draw a line in the sand and distinguish between 2 portfolios: my permanent portfolio and variable portfolio.

My permanent portfolio is my long-term investment strategy. My variable portfolio is short term and medium term plays. Currently my variable portfolio is a little more than 3% of total value w/ Ethereum being around 70% of that 3% portion. I also have some other cryptos in there that I'm less optimistic about.

Permanent portfolio allocations as I've mentioned are:

35% US equities
25% Long-term US treasuries
20% cash
15% gold
5% REITs

My reasoning is simple: Equities + REITS for times of prosperity, treasuries for times of recession, gold + REITs for times of inflation, and cash (equivalents) for times of deflation when the other assets go on sale. Historically the economy tilts toward inflation + prosperity, so I want to weigh toward equities.

Performance-wise since the 70's, this portfolio has slightly lower returns, but much lower volatility and drawdown than the standard 60% equities / 40% bonds. Also worth mentioning that my goal is preservation and modest growth... I don't need to take on more risk by going 100% equities.

But these things are personal and to each their own. It's tough not to get FOMO in a bull market like in 2017 and the first half of this year, but it's times like now where I'm thankful I've diversified in the way that I have.

[3] At this point I consider all the cryptos to be pretty damn risky even though I'm obviously bullish on the space as a whole. If I were advising my brother who is in a similar situation as me and if he wanted to get into crypto, I would tell him to buy some mix of Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Monero, EOS, Cardano, Binance Coin, Chainlink, and Quantum with a heavier weighting on Bitcoin and Ethereum.

For me, I'm willing to take on the risk of individual crypto projects that I'm personally bullish on since my permanent portfolio is pretty conservative.

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RE: The Stock Market, Investments, and Investing Thread - by billydingdong - 08-15-2019, 11:53 PM

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