Hi Steemians,
Over the years I have learned from other people’s mistakes and mistakes I’ve made on my own. But I have fine- tuned my methodology and my approach to increase my probability of being a successful investor. When it comes to Cryptocurrencies, let’s be honest, it’s all about making money to most people. But let’s take a different approach by focusing on how much money we can lose, instead of how much money we can make. This approach is what works for me and you can tweak it or change it as everyone is different.
Psychology
There are two powerful emotions in all of us and that’s greed and fear. We must learn to control these emotions in order to make good investment decisions. Everyone’s heard of “buy low and sell high” when investing, but in reality it’s harder than you think! When prices are crashing and going down everyone is in fear and panic mode and only want to sell and when prices are going up most people are full of greed and end up buying at the top. Crypto’s are volatile, the ups and downs make mountains not little mole hills. Don’t believe me? Just look at some of the charts! This is an absolute must, before taking the big dive into Crypto investing. Plain and simple you must learn to conquer these emotions or you will lose money period.
Risk Management
When it comes to investing the most exciting part to people is that they want to make a lot of money quickly and they only concentrate on how much they can make and not how much they can lose! From this perspective we take calculated risks on investments, where the risk/reward ratio is in our favor. I hate the saying “Go big or go home”! The reason I dislike it because when the people who use this term lose all their money they cry like a baby or get depressed! I actually had a co-worker go through this after my risk management lesson, which of course went in one ear and out the other! So when managing risk, this will affect how you allocate your capital into Crypto’s. So let’s do this right the first time and manage risk properly. If not just take your money and try your luck in a casino instead!
Here are my top 5 investments in Cryptocurrencies: (and in no way is this financial advice, this is just what I’m invested in)
1. Bitcoin
2. Ethereum
3. Antshares
4. Populous
5. Veritaseum
Below is a very simplistic explanation of why I’m invested in these Crypto’s. I’m not going to get into the technical stuff because remember this is for beginners! Simple and Sweet!
Bitcoin
I find most people always say Bitcoin is expensive or why Bitcoin? It’s too slow or old. Well, Bitcoin was the first Crypto, has the biggest infrastructure in place and is the most widely used. So why wouldn’t you have any capital invested in it? Yes, they don’t rise as much as the others, but Bitcoin also doesn’t fall as much and has been around the longest. Sure they have issues but when have you seen any company or investment that’s perfect? As things move forward, Bitcoin will resolve their problems and by then, what do you think the price will be higher or lower? They have a strong development team, sure they don’t agree on everything, but don’t you ever have disagreements with family members?
People say Ethereum will fail or spread fear and negativity towards them, but I see it as a developer/programmers dream. Anyone that has been negative on Ethereum, so far has been wrong and the market is proving them wrong. Can you imagine that you’re a genius programmer/developer and you can use Ethereum to create anything you can imagine with no boundaries. Ethereum is like a toy for a programmer, just imagine if you now had the chance to create your own automated programmable online robot?? This opens the door to endless outcomes for future development. They have a strong development team and very big and interesting projects in development, like Metropolis. How can you not believe in a genius kid like Vitalik Buterin? Does he even look like he’s from planet earth?
Antshares - https://www.antshares.org/en-us
I think the logo is cute and they are the first in China which means huge market! Too bad they are rebranding to NEO and changing their logo which is not as cute, but will still trade under the same symbol ANS on Bittrex! This isn’t why I’m invested, but actually they have a very good dedicated development team and community. There is very good potential as Antshares has many use cases in which they tie together smart contracts and digital assets. In turn, this allows a better way for asset registration, issuance and circulation.
- http://populous.co/index.html
Populous is an invoice and trade platform that is basically a marketplace where invoices against future collections are sold for cash now. This is a new niche market within the Crypto market and is using the Ethereum blockchain. I believe Populous has the potential to dominate this area as they create the next generation financial marketplace. I did participate in the Pre-sale of their ICO before it sold out.
– (slideshow of information) https://docs.google.com/presentation/d/1FMyNvogofqojqG6nkIjgvvjAnsWs1qOtKUFExvtp_m0/pub?start=false&loop=false&delayms=3000&slide=id.g1dbf5b6b89_0_1
Reggie Middleton’s Veritaseum which is basically a peer to peer capital markets using smart contracts on the Ethereum network. I believe this has huge potential and honestly I’ve been following Reggie for years and he’s always made my money grow, so why not piggy back him again! I missed out on the ICO, but managed to pick some up quite cheap on the Ether Delta Exchange (consider me lucky!).
Portfolio Allocation
Allocation of capital is very important as this is how you define your risk in your portfolio. I allocated the most stable and conservative Crypto with the highest % and the most risk with the lowest %. A good analogy is we can’t always hit homeruns on our investments and we know it doesn’t happen all the time, just like baseball players. So you don’t need to risk a lot to make a lot on a homerun investment, especially if it doesn’t play out and you lose everything. Believe me, doing this makes it a lot less painful when your wrong on an investment. Using the five Crypto’s from above for a sample allocation would be 40% BTC, 30% Ethereum, 10% Antshares, 10% Populous and 10% Veritaseum. Depending on your risk tolerance you can dial it up or down for each and as you increase your exposure to the more speculative Crypto’s, you also are increasing your risk, so keep that in mind.
All this information is just to give you a structured idea of how I approach investing in Cryptocurrencies. I hope this helps the people who are new to investing in Crypto’s and if you enjoyed this post don't forget to:
Disclaimer: The information in this blog should not be taken as constituting professional advice from the blog's owner. You should always seek professional advice from a licensed advisor. The blog owner is not liable for any loss caused, whether due to negligence or otherwise arising from the use of, or reliance on, the information provided directly or indirectly, by use of this blog.