Not posted in a while just trucking away with dca and stacking. Was out in the world enjoying life and started to notice Btc in general life, from billboards, graffiti, bitcoin atms etc. I’m not sure if it was always there or not but what do we think about this type of engagement with Joe Public. I wonder has anyone found their way here from something like seeing a btc atm in their local area.
I’m having some serious internal debates on whether to over allocate into Btc this year, I had set some targets around totals with what I felt was balanced and am approaching these way sooner than I thought was possible. With WO’s who have over allocated before any learnings to help me with my own decisions?
Another one been wrestling with is continue to allocate same during a bull and new ath, or under allocate for that time. I see comments about oh know if you bought at the top it’s bad but wouldn’t all dca’rs have bought at the top?
Well? It depends on what you mean by overallocation. So if you have already invested in a variety of assets, and then you are going to bring your BTC allocation to somewhere in the 1% to 25%, then maybe overallocation would be going more than 25%, or if you had set your goal to be 10%, and then over allocation would be going higher than your original goal.
Another thing is whether you feel that you really have your various expenses more than covered in case bitcoin prices go sour for 2-6 years, and then are you going to be needing to dip into your BTC at a time that is not of your own choosing, or would you be able to ride it out?
Firstly thanks for responding, when I say over allocate I mean allocate more than I planned for that year. In this case going from 5% to 13%. Then next year going from 13% to 20%. I think it’s the right term then to say over allocate in this sense. My fun money or my investment money is a bucket after all the other stuff(including rainy day fund). All my investments are long term, and in the green even during this time(btc just about hah)
I do consider though that if I needed to go into my investments I wouldn’t have to go straight Btc to unlock funds but I really can’t think of something happening in life that the rainy day fund wouldn’t cover.
There is nothing really unreasonable about any of that, and I think that after about a year of my being into bitcoin, I started to think that 1% to 10% is a kind of reasonable allocation for me, and for any normie out there in the world, and so when I ended up allocating in the ballpark of 13.5% by the end of 2015, I started to think that I was getting a bit heavier into bitcoin than what would have had been within the prudence/reasonable range.
After March 2020, I started to reconsider what I thought might be reasonable and prudent based on the stronger bitcoin investment thesis that had developed and I largely ended up going up to considering 1% to 25% to be within the range of reasonable/prudent.. so for me, anything within that range would not necessarily overallocation "on its face" absent some further facts explaining why it should be considered "overallocation."
So yeah, like you suggested, if your emergency fund is not very good. then you surely have to be careful about increasing your BTC investment or even investing into bitcoin at all until you get your shit together in regards to making sure that all of your monthly expenses are covered and including having enough of an emergency fund so that you would not have to dip into your bitcoin investment absent some kind of a screw up..or really rare situation.
In my cursory recollection, I can ONLY remember having to dip into my BTC investment in any kind of any meaningful way in October/November/December 2018, and I thought that I had enough funds to cover a variety of expenses that I had that were mostly construction related and the bills had come in way sooner than expected.. including that the project was moving faster than expected (those guys were just too efficient).. and so what ended up happening is that I ended up dipping into somewhere in the ballpark of 3.5% of my BTC holdings, and it was not at a very good time (or BTC price)... and I am pretty sure that within the next six months or so, I was ONLY able to replace about half of the amount that I had dipped into..and actually if we recall that the BTC went up from $4,200-ish to $13,880 from April to June, so there was a bit of a need for me to just write off the inability to timely buy back that sold portion of my BTC holdings within a reasonable period of time.. and I largely stopped dwelling on it because it was kind of water under the bridge and something that I pretty much had to do.. but even if I look at my BTC projections from that timeframe, and I see how many BTC that I hold today at those various price projections, it really seems that I had made up for the amount that I sold and that I had not bought back at that time.. so my BTC portfolio has not really suffered in any kind of meaningful way in terms of possibly selling around 1.75% of it (the portion that I had not been able to buy back at that time).
I think that part of my point is that if you fairly consistently engage in decent BTC portfolio management, you can take a few (or even several) hits to your BTC portfolio, and still be able to experience a solidly growing BTC portfolio, especially as the years pass and the BTC seem to largely continue to build up... and maybe more so if you consider yourself in earlier BTC accumulation phases than me, and I mostly consider myself to be in maintenance stage, even though from time to time, I still will take advantage of some of the dips to accumulate more than a mere maintenance stage would suggest.
Of course, there are some people who don't have any other investments besides BTC and cash, so that might be dangerous to overallocate under those kinds of circumstances.. so maybe questioning whether you have other investments.. and I am not even sure if I recommend getting into other investments, unless you already have them and some employers do not even have matching funds for their 401ks.. which that might cause incentives NOT to invest into 401ks.
I get the sense that you might not have had given enough information.. because when I overallocated into bitcoin from 10% to 13.5%, I had not really realized that I had gotten to 10%, and I thought that 10% would be a good target, but the BTC price stayed down for another year, and I was not exactly killing myself or causing too much extra stress on my finances or psychology by continuing to invest into BTC - but still everyone is different in terms of how solid is their cashflow. .and whether they have their emergency fund (their finances) in decent order in order to continue to buy BTC even though maybe your BTC portfolio might not be exactly profitable at the then current time, and your friends might already be speculating that you have too much into bitcoin (to the extent that any of them know much about your financial circumstances).
In this case I think it’s the psychology playing out, when I have investments perform you always get that nagging feeling you should have put more in. It’s one part greed, one part regret and 3parts content. My fun money total is the same I’m just seeing i can shift funds from other investment allocations and increase btc(lowest allocation).
For sure there is a balance - because you are frequently going to feel as if you should have been more aggressive in your BTC investment approach, even though you may well have had already been sufficiently aggressive.. so those are likely false alarms, even though you might learn a bit about yourself and maybe learn how to make some tweaks in your approach that will help you to feel better overall, which seems to largely be what you are describing yourself to be doing.. tweaks here and there.. to potentially help to feel more comfortable, overall.
And if you end up getting "overallocated" in accordance with your definition, what is that going to achieve? it potentially gets you to fuck you status more rapidly? or does it just give you more options if the BTC price ends up going up, then you feel as if it might be easier for you to shave off some profits from the BTC without feeling guilty about selling some of it?
Punchline. I need more info, and maybe you don't want to share.. which is fine also, but you are the one who asked the question.. and sure you might be able to provide more info without giving up too much OPsec... perhaps? perhaps?
I projected out what this means, and it really just means accumulating more faster. I had originally planned to set some sells in 2033 but it might bring that in closer to 2029. I’m speculating here a bit but maybe being able to retire 4yrs earlier.
Hopefully you are using the 200-week moving average.
I put together a kind of chart for myself that shows that I am authorized to withdraw within some various formulas that change depending on how high the BTC price is above the 200-week moving average..
I have not quite gotten to the point of publishing that chart here yet since it is a bit complicated, and I was considering providing a google spreadsheet for that.. but I was still a bit uncomfortable with my OPsec as it is currently set up... so let me just describe the idea a bit... even though it may or may not quite apply to you... since you might not have gotten to the level of over accumulation (or close enough to fuck you status, as I consider my own situation to be.. but the chart might still potentially apply as a kind of consideration point. perhaps?)
so in essence the higher that the BTC price is above the 200-week moving average, then it authorizes multiples of months of withdrawal ahead of time, so for example if I had already established a monthly withdrawal amount that could be anywhere between 1% of the value of my investment portfolio and perhaps down to 0.33% (which would be between 4% and 12% annualized depending on how much I want to authorize), and once the BTC price 33% above the 200 week moving average, then I am authorized to withdraw 2 months in advance rather than one month at a time...
and so if the BTC price is 100% above the 200-week moving average, then I am allowed to withdraw 6 months of my monthly allowance, and so there are incentives to wait for higher BTC prices in order to be able to withdraw more months in advance... and of course, if you exercise your withdrawal too early, then you have to calculate that into limiting how much you subsequently withdraw, and so for example if the BTC price is 900% above the 200-week moving average then I am able to withdraw 48 months in advance or if it is 1,900% above the 200-week moving average, then I am able to withdraw 60 months in advance.. so these surely can be challenging because the 200-week moving average and the BTC price are each continuously changing.
BTC prices have gotten to those kinds of outrageously high multiples of the 200-week moving average in the past, but surely there are no guarantees that BTC prices will get that high above the 200-week moving average in the future, but I have some formulas that help me to personally deal with those kinds of situations..
and if you are personally talking about BTC in terms of years (such as 2029 versus 2033).. then you might not even be ready to apply the formulas that I am discussing until you get past your year thresholds which seem to me to be a point in which you are thinking that you are potentially getting at, near or even exceeding entry-level fuck you status.
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