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

[OROBTC]

...

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.

[1714895307]

1714895307

[1714895307]

1714895307

[1714895307]

1714895307

[1714895307]

1714895307

[1714895307]

1714895307

[Jemzx00]

Maybe you are referring for the word "All In" rather than the word "All Inn" you repeated again and again. "Inn" is like a lodge or a restaurant.
By the way, I agreed on you that investing "all in" is something that noone should do. But on the way that you've explained it isn't really makes it so bad since he got money to pay his hospital bills even though he loss some money.
Yes, I agree that we shouldn't invest "all in" since in all investment there would always be a risk so rather than investing all in just one then why not spread it into other investments. But just as I've said don't put "All" so you must atleast leave 50% of all the money you have in you.
There is a saying that "We shouldn't put all our eggs in just one basket" (I don't know if that's the exact words in those saying). This must be kept in mind to all gamblers and investors.

[OROBTC]

Maybe you are referring for the word "All In" rather than the word "All Inn" you repeated again and again. "Inn" is like a lodge or a restaurant.
By the way, I agreed on you that investing "all in" is something that noone should do. But on the way that you've explained it isn't really makes it so bad since he got money to pay his hospital bills even though he loss some money.
Yes, I agree that we shouldn't invest "all in" since in all investment there would always be a risk so rather than investing all in just one then why not spread it into other investments. But just as I've said don't put "All" so you must atleast leave 50% of all the money you have in you.
There is a saying that "We shouldn't put all our eggs in just one basket" (I don't know if that's the exact words in those saying). This must be kept in mind to all gamblers and investors.

It's a saying, mi amigo!  A metaphor...  Guess you're not a "gold guy", smile...   

(Think that all your investment is staying at the inn)

But, you understand my main point well.

[Hydrogen]

There have been multiple studies done over the years which concluded the vast majority of stock market & commodities traders fail to produce greater than 5% profits.

I think that's where most pro diversification rhetoric comes from.

The unspoken understanding that most who try to be successful traders/investors are not which makes planning for worst case scenarios a standard procedure.

Diversification could also be standard procedure for crypto given the lack of historical precedents to draw upon. Crypto is essentially uncharted territory.

[Gotottack]

I think this problem "comes with the territory" as the saying goes. You either view it as losses that is included in the job or just saying it's plain bad luck. But, I would say that this could have been greatly prevented if there would have been an emergency fund set aside or an insurance policy. What if the opposite happens though? If prices raised up by 2x or even ten folds? Mr. imaginary friend will be pleased of his choice for sure.

[magneto]

...

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 100% agree with you.

The way to go is to diversify your selected investments.

Hedge your bets so that even if one of the investments you made went down or went scam, you'll still have money more that you can rely on easily. You can sleep well in your dreams

The issue with most people is that they look at youtube, see "Gold is going up to $1 million an ounce" and then either dismiss it completely or make an investment in it with everything they've got.

That's not wise.

[Mvaporis1961]

Investing all in on every investment program is a big no.Even if its a long term or short term investment all investment may lose and turn out to scam.Dont go all in on every long term or short term investment because you may up losing all your money if the investment failed or turn to scam

[Pearls Before Swine]

Maybe you are referring for the word "All In" rather than the word "All Inn" you repeated again and again. "Inn" is like a lodge or a restaurant.
By the way, I agreed on you that investing "all in" is something that noone should do. But on the way that you've explained it isn't really makes it so bad since he got money to pay his hospital bills even though he loss some money.
Yes, I agree that we shouldn't invest "all in" since in all investment there would always be a risk so rather than investing all in just one then why not spread it into other investments. But just as I've said don't put "All" so you must atleast leave 50% of all the money you have in you.
There is a saying that "We shouldn't put all our eggs in just one basket" (I don't know if that's the exact words in those saying). This must be kept in mind to all gamblers and investors.

Thank you.   This forum has become like a New York City homeless shelter, i.e., a melting pot of illiterate retards.

But OP is right, and diversification should be so obvious at this point that such a long-winded explanation should be unnecessary.   I think crypto ought to be an extremely small part of anyone's portfolio because of the huge risk.

[aTriz]

...

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.

Personally I think the wisest thing that a prepper can do is to diversify his stock of everything, like you have suggested right here.

 You are absolutely spot on about even if gold is a good investment and is guaranteed to fight inflation, it is not a good idea to get all your wealth into gold. The reason for that is because if you are going for the long term and in the short term if you have a very big emergency that forced you to liquidate your gold, then you're probably going to liquidate it at a loss because of the spreads on physical gold.

I would say hold around 30% bitcoin, 30% precious metals, and the 40% should be your own decision what you want to invest in.

I wouldn't own any land because that's worthless in times of crisis. And it's in a bubble right now, i can feel 2008 repeating itself.

[Iranus]

...

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.

Yep.  And that explains why volatility isn't completely acceptable - if you put a lot of money in something, you're going to have to sell it eventually, and the price might be down dramatically then even if you think it'll go up in the next 5 years.

Still, in my country the health services are in the public sector, and we have safety nets in some cases.  If you're wealthy though and you pay for things often it's always a huge problem.  People ignore that the end goal of this isn't money, it's enjoyment - you're not just saving until you're 100 years old and your back hurts too much to go paragliding.

[deisik]

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

You basically confirm what I'm repeatedly telling myself to the public here

Namely, that hoarding gold makes sense only for the rich and by rich I refer here to those who are already rich well beyond the necessity of looking for cash in case of emergency. Gold is not an investment asset in the sense of using it as a means of multiplying your capital, i.e. making more money out of money. Gold is there to preserve wealth when you already have that wealth and don't trouble yourself with questions of procuring money for paying medical bills

[RoommateAgreement]

there is a simple solution for you all in scenario:
invest the money you don't need and can afford to invest.

all of us usually have some funds for emergency that we don't touch. and it is always best to invest some additional money you have which is just lying around and does nothing.

all in, diversify,... are for that money not all your lifesavings. in which case i think your argument doesn't apply. because you invest and you never get to a point where you abosolutely need the money so you can only sell when the time is right.

[pinkflower]

It depends. If youre a person who doesnt have enough money to make diversifying make sense then going all in in one stock or one altcoin and hope for the best is your only ticket out and create a meaningful amount in your life.

Diversifying for the sake of it without thinking of your situation is stupid.

[Slow death]

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

You basically confirm what I'm repeatedly telling myself to the public here

Namely, that hoarding gold makes sense only for the rich and by rich I refer here to those who are already rich well beyond the necessity of looking for cash in case of emergency. Gold is not an investment asset in the sense of using it as a means of multiplying your capital, i.e. making more money out of money. Gold is there to preserve wealth when you already have that wealth and don't trouble yourself with questions of procuring money for paying medical bills

I agree. Unfortunately many people do not understand this, they can probably feel offended

It depends. If youre a person who doesnt have enough money to make diversifying make sense then going all in in one stock or one altcoin and hope for the best is your only ticket out and create a meaningful amount in your life.

Huh I think that people should have money and then do research and have at least 2 or 3 investments.

If you have only money to invest in one place, I suggest you do not knife it, wait until you have the money to make 2 or more investments.

[talkbitcoin]

It depends. If youre a person who doesnt have enough money to make diversifying make sense then going all in in one stock or one altcoin and hope for the best is your only ticket out and create a meaningful amount in your life.

Huh I think that people should have money and then do research and have at least 2 or 3 investments.
If you have only money to invest in one place, I suggest you do not knife it, wait until you have the money to make 2 or more investments.

if you don't have enough money you can not diversify there is no point in that since you are not getting any benefits out of it. so it is best to go "all in" in one thing that you think has the best to offer you in sense of profit and stick to it.

and "waiting around to make more money then invest" is a terrible advice in my opinion. you can use that "wait around" time to double what you already have.

[Kemarit]

...

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.

Very well said mate. When I was starting on buying stocks, this is the first thing I've learn. You have to spread your investment around so you will not be caught your pants down when the scenario you mentioned above will happened. This strategy is complex to some, but it is simply about spreading your portfolio across several assets like stocks and bond, mutual funds and others. Diversification can also reduce the risk and volatility in your portfolio, But you also need to remember to also hold cash as well, just in case of certain emergencies.

Diversification: "Place your eggs in different baskets."

[Mpamaegbu]

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.

Yes, sometimes the temptation to go all out on a particular investment because of its juicy nature may be there. But as humans, no one can correctly  predict the future. We can only take a guess and most often than not we make bad business calls. So, it's advisable not to throw in all one's fund into one investment. Diversification is key in business.

[LeGaulois]

We can only take a guess and most often than not we make bad business calls. So, it's advisable not to throw in all one's fund into one investment. Diversification is key in business.

There is no place for guessing when it's about investing . Banks, for exemple, don't make bets about their investments. Thet have drastics studies about markets they plan to invest and make strict due dilligence. But I agree. Diversity is a basic while building any portofolio simply because the financial markets do not evolve in the same way, each sector has its logic of progress and can be influenced by external events independently. Rarely you will see big investors, banks, or investment funds putting all theirs funds in only one plan. So, in my opinion, It allows to limit the risks and the impact of a decline in a sector on the overall portfolio. At the same time, it also allows to increase the performance potential of the portfolio

[Hypnosis00]

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.

[Mometaskers]

Seems our old folks already had it figured out when they tell us to "don't keep all the eggs in one basket,". Sure, going all in might get you a larger profit if ever, but you could also lose a lot if things go wrong. I agree with OP in that it's possible that you might need the money just at a time when the value is dropping. And this is why we still have fiat. It's just more liquid than precious metals.

I believe this go hand in hand with common sense stuff like having a separate emergency fund as well as a living fund so you don't have to bother touching your other investments. Also, you shouldn't invest money you can't afford to lose anyway. If you're buying gold or bitcoin, I assume you already have some money stored for your regular and unexpected expenses.