One Reason not to be "All Inn" on any Single Investment for Long

[Xester]

Well experienced traders know this stuff and there is no need to lecture them about this. But your topic is quite useful to the newbies who are very excited and emotional about trading and investing. Diversification is a good principle in trading since it will lessen your risk but also lesser  income. But for some risk takers diversification is not necessary since even before they placed their capital on such item they already are ready to take the risk and willing to earn big.

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[BrewMaster]

but remember that sometimes going all in is what it takes to change your life. i am not suggesting it but that is something to consider. it is a high risk, high reward type of situation. you find some good opportunity and do your research and analyze all the risks. if you find the reward worth the risk, then going all in can change your whole life for the better.

imagine buying 1BTC one year ago at $400 versus buying 100BTC the same time which is investing $400 versus investing $40,000 which is kind of a all in.
the first investment makes you $800 profit and your money is a total of $1,200
but the second investment makes you $80,000 profit your total into $120,000

[deisik]

Nature itself is unpredictable and that applies to business too. It's the reason the expression,"Don't put all your eggs in one basket."  will forever remain the wisest saying in busines for me

I guess there is a lot more than just not putting "all your eggs in one basket"

Just blindly diversifying your investments may not decrease your total risk but actually increase it (read mean more losses). That means that you would be better off if you didn't diversify your investments at all. Just repeating the same mantra again and again will most likely lead you nowhere on its own. You should first understand how assets in your "baskets" are correlated against each other, and how they will behave under economic stress since such diversification seems to be primarily directed at preserving value (for the case when your proverbial basket gets crushed)

[Carlsen]

Nature itself is unpredictable and that applies to business too. It's the reason the expression,"Don't put all your eggs in one basket."  will forever remain the wisest saying in busines for me

I guess there is a lot more than just not putting "all your eggs in one basket"

Just blindly diversifying your investments may not decrease your total risk but actually increase it (read mean more losses). That means that you would be better off if you didn't diversify your investments at all. Just repeating the same mantra again and again will most likely lead you nowhere on its own. You should first understand how assets in your "baskets" are correlated against each other, and how they will behave under economic stress since such diversification seems to be primarily directed at preserving value (for the case when your proverbial basket gets crushed)

I think that would something for professional investors.
For an average person it's asked a little too much to analyse how different investments behave when the market developes into a certain direction.
An average person simply has to split up to keep his risks at a low level.

[meliodas]

Yeah the first thing that I learned when bitcoin was first introduce to me was never to put all of your eggs in one basket,
And also invest only what you can afford to lose so I never tried to invest all of my money in just one investment.

[deisik]

Nature itself is unpredictable and that applies to business too. It's the reason the expression,"Don't put all your eggs in one basket."  will forever remain the wisest saying in busines for me

I guess there is a lot more than just not putting "all your eggs in one basket"

Just blindly diversifying your investments may not decrease your total risk but actually increase it (read mean more losses). That means that you would be better off if you didn't diversify your investments at all. Just repeating the same mantra again and again will most likely lead you nowhere on its own. You should first understand how assets in your "baskets" are correlated against each other, and how they will behave under economic stress since such diversification seems to be primarily directed at preserving value (for the case when your proverbial basket gets crushed)

I think that would something for professional investors.
For an average person it's asked a little too much to analyse how different investments behave when the market developes into a certain direction.
An average person simply has to split up to keep his risks at a low level

It is like technical analysis

The more intricate and complicated it becomes, the more you expect it from it. But in most cases this complexity doesn't add anything to your profits (though it allows you to use buzz words like Elliot waves and similar nonsense). If you randomly split up your assets, how do you know that your risks did in fact reduce? What if all your assets start collapsing simultaneously, as it often happens?

[Carlsen]

Nature itself is unpredictable and that applies to business too. It's the reason the expression,"Don't put all your eggs in one basket."  will forever remain the wisest saying in busines for me

I guess there is a lot more than just not putting "all your eggs in one basket"

Just blindly diversifying your investments may not decrease your total risk but actually increase it (read mean more losses). That means that you would be better off if you didn't diversify your investments at all. Just repeating the same mantra again and again will most likely lead you nowhere on its own. You should first understand how assets in your "baskets" are correlated against each other, and how they will behave under economic stress since such diversification seems to be primarily directed at preserving value (for the case when your proverbial basket gets crushed)

I think that would something for professional investors.
For an average person it's asked a little too much to analyse how different investments behave when the market developes into a certain direction.
An average person simply has to split up to keep his risks at a low level

It is like technical analysis

The more intricate and complicated it becomes, the more you expect it from it. But in most cases this complexity doesn't add anything to your profits (though it allows you to use buzz words like Elliot waves and similar nonsense). If you randomly split up your assets, how do you know that your risks did in fact reduce? What if all your assets start collapsing simultaneously, as it often happens?

I think that the investment decision of an average person is random.
So in the end, it ads up to the hope that a lot of random decisions lead to an increase of your fortune, when the superior market is growing. And in general, markets usually grow.
When you pick just one fraction of the market, that fraction alone may decline.

[Theb]

Well one thing is for sure that you are afraid of what you are investing in. Can you imagine the opportunity that will be lost if you have diversified your portfolio? Don't get me wrong on this one but if you spread your money to a lot of investment you just lessen the risk but did not maximize your profit also you added a lot of things to be manage by you. I still believe that you can always go " all in" in the investments you are sure will pay you the most. Just my two cents.

[CraigWrightBTC]

My reason not to be all inn on any single investments for long time strategy is high risk losing money (include on digital coins),
in all of instrument of investments always there are risk must be taken by investors
the good investors always calculate about risk in investments, they don't just think about the profit.

[Golftech]

Well one thing is for sure that you are afraid of what you are investing in. Can you imagine the opportunity that will be lost if you have diversified your portfolio? Don't get me wrong on this one but if you spread your money to a lot of investment you just lessen the risk but did not maximize your profit also you added a lot of things to be manage by you. I still believe that you can always go " all in" in the investments you are sure will pay you the most. Just my two cents.

you have some point from there mate, if you are really sure regarding to your investment you can do an all in, the thing is how sure are you with that particular investment? that's how things changed up placing your investment, splitting it up to lessen the risk and also to try some stakes we aren't sure what crypto will bring us so we just understand the movements and try to manage everything.

[rickadone]

My reason not to be all inn on any single investments for long time strategy is high risk losing money (include on digital coins),
in all of instrument of investments always there are risk must be taken by investors
the good investors always calculate about risk in investments, they don't just think about the profit.

Yes, we never can be sure about the future. Even for short-term investment, financial experts never suggest to go "all-in", because no one could foresee the future.

One investment must be based on calculated risks like we should not always think about profits but we should always be ready to face losses too. I believe no one will be ready to lose all his wealth just with the one investment opportunity. Hence "all-in" should be avoided.

[deisik]

Nature itself is unpredictable and that applies to business too. It's the reason the expression,"Don't put all your eggs in one basket."  will forever remain the wisest saying in busines for me

I guess there is a lot more than just not putting "all your eggs in one basket"

Just blindly diversifying your investments may not decrease your total risk but actually increase it (read mean more losses). That means that you would be better off if you didn't diversify your investments at all. Just repeating the same mantra again and again will most likely lead you nowhere on its own. You should first understand how assets in your "baskets" are correlated against each other, and how they will behave under economic stress since such diversification seems to be primarily directed at preserving value (for the case when your proverbial basket gets crushed)

I think that would something for professional investors.
For an average person it's asked a little too much to analyse how different investments behave when the market developes into a certain direction.
An average person simply has to split up to keep his risks at a low level

It is like technical analysis

The more intricate and complicated it becomes, the more you expect it from it. But in most cases this complexity doesn't add anything to your profits (though it allows you to use buzz words like Elliot waves and similar nonsense). If you randomly split up your assets, how do you know that your risks did in fact reduce? What if all your assets start collapsing simultaneously, as it often happens?

I think that the investment decision of an average person is random.
So in the end, it ads up to the hope that a lot of random decisions lead to an increase of your fortune, when the superior market is growing. And in general, markets usually grow.
When you pick just one fraction of the market, that fraction alone may decline

And how does it relate to (not) "putting all your eggs in just one basket"?

If markets usually grow (as you say), you could just buy a market index and (allegedly) get done with that. While in reality markets grow as well as collapse, so all your baskets of eggs will get crushed if the latter happens. After all, isn't that what we use different "baskets" for, i.e. to avoid crushing? I guess putting eggs in random baskets doesn't actually decrease the chances but you may hit a jackpot, of course (just like a broken clock is correct twice a day)

[Dimelord]

...

I have long written that diversification is a very smart idea.  No one can predict the future, etc.  But discussed below is another reason not be 100% in ANY investment, at least for long.  I ran into this argument at a gold blog.

Imagine that you are 100% invested, "All Inn", in gold.  Even if the price of gold were to go way up, there is still a big risk that many don't see.  Namely what happens if there is a big price drop JUST when the owner might NEED to sell (eg, an unexpected emergency).  If our imaginary friend bought in at $1275 gold (approx. price today), and then price drops to $900 (Martin Armstrong predicts a sharp price drop like this, prior to a big price rise, a "slingshot" price rise after its initial drop).

And then, just at a bad time for the gold owner, he might need money (US dollars) to cover an unexpected $200,000 medical bill.  And he if forced to sell his gold at a 25% loss to cover his bills...  Ouch!  It would hurt even more should gold then go to $2500 per ounce.

So, it is unwise to be All Inn on gold, even if we were to be very sure that $2500 gold is coming.

The above scenario would hold for Bitcoin as well, or anything else to be held long-term.

Some of us gold owners have a saying: "Protect the precious."  That means keep some powder dry (CA$H on hand) for the unexpected.

I do agree with you to some extent.I would rather invest 60% of my money into an asset or bitcoin and would keep the remaining 40% as cash in my hand.And i would chose bitcoin for that 60% to invest and not gold as bitcoin could give me more returns than gold.More over,bitcoin price is yet to increase more in future.

[Idrisu]

Even the holy scripture said " scattering your bread on many waters then few day you will find them" it is very unwise for one to put all his investment in either bitcoin or gold e.t.c. Diversification is the key to long term investment success. With the hope that bitcoin will get to $2000 before the end of this year is not a guaranty for me to put all my risk capital into bitcoin.

[darkangel11]

My reason not to be all inn on any single investments for long time strategy is high risk losing money (include on digital coins),
in all of instrument of investments always there are risk must be taken by investors
the good investors always calculate about risk in investments, they don't just think about the profit.

While this is true there's also another way of seeing it. If you put your money in a number of high risk contracts the total risk-gain ratio remains the same. For instance if we assume that one altcoin has 50% chance of success and you split your money (1USD) between 2 of them, your chances of earning money decreases along with the chances of going broke.
Normally it would be 50% that you make $2 from your $1 and 0 if it fails. Now you will need both of them to succeed to reach your desired $2, but also for both of them to fail to be completely broke.

[Barbut]

Going all in in just single investment for a long run is not a good idea because it is very risky because you are not trying to make your money in different investment as flexible as you can because if you are just putting it on one then you can consider yourself in danger because you don't have any back up if the investment will experience bankruptcy.

I agree that all in on long run is very risky, million things can happen in time of waiting, and that puts investor in very bad situation for him. Going all in is strategy that almost no one recommends, but I saw (and others I`m sure) people that had balls to risk and some of them made profit. We all have a chance to do something in this life, how much someone is smart to notice opportunity and brave to grab it with all in can be rewarded with some very high reward. Of course bankruptcy is always a possibility when someone is going all in, that is the thing, if its easy everyone would do it.

[Sled]

The only one reason not to be all in on any single investment for long is just because "It is risky". As Warren Buffet says that "Never depend on single income. Make investment to create a second source." in that saying, we can really realize that even the one of the most riches person in the world believe that it is best to have a second source of income rather than sticking to just one investment because we all know that it is not good because if an investment will go down then you don't have any escape from that and you will suffer from loss, so it is better to just spread your money in different investments.

[pooya87]

Some of us gold owners have a saying: "Protect the precious."  That means keep some powder dry (CA$H on hand) for the unexpected.

that is true, and maybe it is just me but whenever i am talking about investment or say all in, diversify, all eggs in one basket,... i am automatically talking about the investment money and investment money is not all your worth.

you have a life, some money as your "rainy day" funds and then have some extra money that you don't need and you make the investment with that money. and as far as i can tell this is what majority of people in the world are doing. so it doesn't need mentioning. all in means investing all that money which i say can be a good thing.

[freebutcaged]

I agree but that doesn't apply to mining though, because mining is a risky investment and an investment non the less, when you want to go invest in mining you are buying either GPUs or ASICs and that will take time for your ROI, unless you have a better idea and something more profitable than Bitcoin to mine or how does it work if you'd wanted to diversify your investment in mining hardware?

Trading is also either you buy to hold for long term=like mining=risky. or day trading which you can eliminate any possible extra risk in matter of hours or even minutes.
Did you know ETH will pump from sub $7 up to $40? but guess who could've guessed it? someone already holding %40 of the supply and then investing $200m to start buying the tokens starting from $7 easily up to $30 and by that time other investors were entering because of FOMO and actually were buying his %50+ of total supply now.

Right now if someone puts $500m into buying LTC starting from $10 can successfully pump the price to $20 and by that time others will put more than $500m because of FOMO and they in turn will further pump the price up to $30 and so on until big whales and big holders wake up and see the opportunity then the dump starts.

Unlike Bitcoin which it's growth over time is very natural and not artificial like alts and there is a real demand for it, so I don't see any reason why not going all in with Bitcoin.

[MissGrey]

Diversify obviously is a good idea, my brother told me he was forced to sell his ICN because he was ran out money in the first days of this coin distribution, He sold all his ICN at 0.00014600 today the price of 1 ICN is worth 0.00034873,  that's why I'm always trying do diversify In my investments. Currently, I'm holding ETH and DASH and I'll wait until forever if I don't see the price rising.