I have been trying to make this comparison, which asset would I prefer most in case I was told to pick one and stay long term. My recent article was centering on how one could box a better investment portfolio to stay long term. My focus was on yields, fixed and hard assets.
It was one good article to read. You know going long term requires a result generating strategy. There will soon be a financial explosion, this is something I am not tired of saying over and over again. The Internet space will brood new millionaires; take it or leave it.
That said, my follow up article was what I would have personally chosen assuming I was told to hold on to one of two above. Would it be a yield or fixed (asset). Let's do a little recap of both before going much deeper. What are yield assets? In the volatile space like crypto this should be a very familiar statement; this consists of assets that pay out dividends daily, weekly depending on the stakes. Take for instance Hive and LEO tokens. If you hold some Leo tokens, you will get some daily droppings as rewards. Same goes with Hive if you delegate it.
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Looking at stables or fixed are those digitals that pay fixed rewards annually. For instance, we can talk of the HBD that gives 15% annually. Not bad, if you have enough stacking power. I mean you could just go to sleep with certainty your $100,000 dollars will TOP up by 15%. So the question NOW is, if you were to go long term in one of it which would you prefer?
The first to put into consideration is the yield assets itself. What are its market certainties? A little brainwork needed here. You will have to consider the amount of token dividend to be paid out. What is this payment pegged to (is it fixed in dollars fluctuations or just a fixed amount of token as pertaining to holdings. And also, the minimum requirements in a rise or a market fall that keeps you in profit. Another good instance is the Leo tokens.
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You know dividend can also offset a falling market price. Personally, I don't know how the dividend mechanism is operated (fixed or fluctuating with dollars). I think it's the latter because when prices fall, I happen to always get more tokens. A very good one of so because you get to hold more at a falling market, you will only need a few percentage price recovery to stay in winning ways. Nevertheless, you have to be very selective of that asset. Yes the crypto market is volatile yet some are more volatile than others.
I was also looking at how much ROI one would get on a five years investment of $10,000. You will have to consider it's compounding effects too. First year will equal $11,500, the Next will be $13223, $15208, $17489, and the fifth year will be $20,112 dollars. Ok, we are talking of roughly 100% compounding effect. Not bad anyway if you have the millions to secure such positions.
In summary what I am seeing here is that the decision will depend on who actually is investing. You telling me to invest $1000 to get $2000 in five years looks more like a joke. It wouldn't be for someone throwing in $1,000,000. Ok, you get me there, I would have personally taken my little bucks to target the yield markets. Both investments are good, it is ALL about what you want to risk; more money or depending on your asset class to be a good one. We have seen asset kicks by 1000%, 2000% and even much more than this. This yield market will be a playground for medium investors, one of the reasons I am seeing web3 to thrive in the near future.