Today we will analyze 2 opposing strategies for extracting profit from the market.
📌 HODL
You choose an asset, such as ETH, and start buying regularly once a month/week/day. Don’t pay attention to the price, the main thing is regularly and for the same amount.
🔼 Pros:
Analysts at JPMorgan calculated that over the past 20 years, the average investor's return was 2.9%, outperforming only inflation. While the SP500 grew at 7.9% per year. It is much more profitable to buy and forget.
🔽 Cons:
- Discipline (forgot to buy)
- Emotions (it’s scary to buy when everything is falling)
- Fear of news (Bitcoin is a scam, ether will be regulated...)
This is why not everyone can follow a DCA or HODL strategy.
📌 Speculation
Trying to buy cheaper and sell more expensive, hunting for the best entry and exit points.
Speculators use a variety of strategies to gauge market sentiment:
- Fear index/crowd mood (buy when blood is flowing, sell when there is euphoria).
- Technical analysis (Buy under the 200-day MA)
- On-chain metrics
- And even lunar phases ;)
🔼 Pros:
You can preserve capital during a market decline and outperform the market during a rise.
🔽 Cons:
Often the market tends to give false signals, fakes, manipulations, etc. Emotions can trick you into selling during a depressed market. And this is the best entry point.
✅ The truth is in the middle
Instead of trying to just HODL or just speculate, create 2 portfolios:
1️⃣ Long-term for 5-10 years with fundamental projects. So far these are BTC and ETH. Invest regularly, small amounts on a buy-and-forget basis. Just don’t forget the seed phrase.
2️⃣ Portfolio for speculation on trends, altcoins and any ideas.
Remember, there is no perfect strategy. Discipline, experience, perseverance and luck are the holy grail.
📌 Repost so as not to lose
