Does the DCA strategy inspire newbies to invest?

[JayJuanGee]

[edited out]

I am not sure that I understand your distinction @Sticky Bomb.  What are you arguing exactly?

In simpler terms what I'm arguing is that the main focus of a serious investor should not be on how much he's accumulated just like suhadi88 proclaimed in my bolded text, but on The quantity he's set out to accumulate and keep on adding to his portfolio until he arrives at it.

That seems like a distinction without a difference, and even potentially distracting from what the goals of anyone might be.

It seems kind of fantastical to imagine some quantity of bitcoin in the abstract as being relevant, since the target would be ongoingly moving both in terms of valuations and in terms of how much bitcoin any of us might have had been able to accumulate, whether we are taking measurements at 4 years, 10 years, 15 years or some other increments along the way in our bitcoin accumulation journey.

I believe where we place our focus matters, because focusing so much on our current success more than the actual target ahead may induce an unnecessary sense of satisfaction which may lead to lack of focus and action, especially if you've stacked up for a while but yet to reach your accumulation target,

You seem to be referring to a skepticism about abilities to focus and discipline rather than an attempt to strive for meaningful assessments, and yeah for sure, any of us might get distracted by the riches and the big tittie bitches along the way... but I doubt that we should be presuming that guys don't have abilities to stay focused and to assess and reassess and to account for both the various facts but also the potential (and likely) changes in their measuring tools along the way.

It makes little sense to stay blindly locked in on some goal(s) and/or targets that might have had been first formulated 4 years, 10 years, 15 years or some other earlier timeline without ongoingly measuring..and maybe even making alterations in the ways of attacking the bitcoin accumulation matter.

For example, if a guy has an income of $30k per year and he is ongoingly investing $100 per week, then such bitcoin investor should be able to take snapshots along the way in terms of how much income his accumulated bitcoin stash would be able to generate based on his ongoing accumulation and valuation of his stash.

I will agree with you that guys will get distracted into valuing their bitcoin stash at bitcoin spot prices rather than making sure to valuate their bitcoin with more durable and substantial ways, such as using the 200-WMA, yet I still doubt that there is much value to proclaim that they need to stick with their original ways of assessing their bitcoin investment - and in that regard, it is likely that after 4 years, 10 years, 15 years or some other amount of passage of time investing in bitcoin, the bitcoin investor is going to become more sophisticated in his ways of valuating his bitcoin stash.   

For sure, there are so many examples of guys who sold way too many bitcoin too soon, and yeah, guys are going to have to suffer the consequences of their dumbness when they end up going down the road of selling too many bitcoin too soon, yet I still doubt that the fact that there are a lot of historical errors should be guidelines for guys to figure out and come to the correct conclusions about how to go through the various phases of their bitcoin accumulation journey, and then perhaps their bitcoin maintenance time frame prior to their starting to employ sustainable withdrawal theories or whatever might be their ways of liquidating their bitcoin whether they decide to so it in sustainable ways or if they end up cashing out their principle and expediting their ways of cashing out their coins.

so my argument is that it is better to focus on your accumulation target and strive to achieve it within your holding period, rather than focusing so much on your already accumulated stash and as a result loose sight of your initial target.

I will agree that there are a certainly large number of guys who will get distracted by bitcoin price, and they may well slow down stacking bitcoin too soon and/or they will start to sell bitcoin too soon, yet I doubt that practices to blind oneself to their ongoing progress and monitoring of their progress is going to be the solution to such faltering attention, and surely there are likely ways that guys have to spend their 4, 10, 15 or other amount of years in ways that get them to learn how to reasonably valuate ongoing progress, whether they are measuring quantity of bitcoin, amount invested into the bitcoin, value of the bitcoin in dollars (spot price and/or 200-WMA), the spending power of the bitcoin stash and/or possible sustainable withdrawal practices (price-based and/or time based).  It seems that guys likely have to figure out ways to play around with their various ways of assessing and perhaps even ongoingly be assessing their current status along with if they have reached or are getting close to reaching their goals and perhaps considering if there might be any changes that they might want (or need) to make to their bitcoin accumulation and/or maintenance practices when they are on their way to reaching a sufficient quantity of bitcoin or more than a sufficient amount of bitcoin.

[edited out]

Well, I don't see any much difference about focusing on your target instead of the accumulated bitcoin because at the end, the distance between your current portfolio and your accumulation target will involve subtracting your accumulated bitcoin from your accumulation target. It is better to even focus on your accumulation process (DCA), instead of focusing either on your accumulated bitcoin or your accumulation target to be able to avoid getting pressured. If you focus on your accumulation process instead of accumulation target, you may wake up one day to realise that you have even exceeded your accumulation target without putting yourself under pressure that comes with knowing that you still have a long way to go.

In summary; Focusing on your accumulated bitcoin can cause laziness while focusing on your accumulation target can cause pressure (wanting to go overly aggressive) which may ruin your entire portfolio.

I think that any of us could come accross situations where we might end up reassessing our bitcoin accumulation status, and surely it is likely better to reassess and realize that we have more bitcoin than we need as compared with the opposite of not having as much bitcoin as we thought that we needed.

Many guys know that I have been in bitcoin for right around 12.5 years, yet even with some of my own assessments of how to manage my bitcoin stash and even how I should behave in accordance with my bitcoin stash, I have several times come up with new ways of valuating my bitcoin stash and tweaking aspects of my conduct based on my reassessments.

It also seems that actually having the bitcoin becomes much more important in any assessment based on having theories about how many bitcoin might be needed, so we can create ball park assessments in order to help us to make progress in the direction that we believe that we need to go, such as ongoingly accumulating bitcoin, and so many times if we make assessments to the valuation of our bitcoin stash, we want to be erroring on the side of having enough or more than enough, rather than erroring on the side of not having enough, which is also part of an assessment in which guys found out that they ended upselling too many bitcoin too soon because they wrongly valuated the quantity of the bitcoin that they had and how many they would be able to sell on a regular basis whether they were to follow some kind of a price-based withdrawal practice  and/or a time-based withdrawal practice, and yeah, if they mis-measured how many bitcoin that they needed, then they would find themselves overly depleting their bitcoin  and not able to continue to live off of their bitcoin and/or to supplement their income with their bitcoin.

Sometimes guys need to present information about quantity of bitcoin and income, even if they present fictional numbers in order to attempt to help out in the assessment of whether guys might be following sound practices in their assessment of their bitcoin stashes and whether they believe that they are going to be able to sustainably withdraw from their bitcoin stash or if they might merely be planning to cash out their bitcoin and become no coiners.

I am not sure that I understand your distinction @Sticky Bomb.  What are you arguing exactly?

In simpler terms what I'm arguing is that the main focus of a serious investor should not be on how much he's accumulated just like suhadi88 proclaimed in my bolded text, but on The quantity he's set out to accumulate and keep on adding to his portfolio until he arrives at it. I believe where we place our focus matters, because focusing so much on our current success more than the actual target ahead may induce an unnecessary sense of satisfaction which may lead to lack of focus and action, especially if you've stacked up for a while but yet to reach your accumulation target, so my argument is that it is better to focus on your accumulation target and strive to achieve it within your holding period, rather than focusing so much on your already accumulated stash and as a result loose sight of your initial target.

People start investing and holding Bitcoin for different reasons and purposes. There are people who wants to stash at least 10 BTC before they retire from active service, this set of people set their target base on quantity of Bitcoin. There also people whose strategy is to invest at least 20% of their income into Bitcoin, this set of people do not care about the quantity of Bitcoin that will give them and as long as they continue to invest 20% of their income into Bitcoin, they are satisfied. I don't think there should be argument on what constitute a target, what we should be discussing is the process for which JJG have made a fantastic strategy which we can tailor to individual needs and do better with our Bitcoin accumulation.

One thing is targeting how to accumulate bitcoin, and another thing is assessing the extent that any guys might assess that they had reached their accumulation goal.

It seems to me that many times guys will have a more aggressive bitcoin accumulation phase, and then they may well slow down into a more moderate bitcoin accumulation phase, and then they may well start to ONLY buy bitcoin on dips, and then they may well stop accumulating except maybe in extreme dips and then maybe at some point they will get into a stage where they are starting to sustainably withdraw bitcoin in price-based and/or time-based ways.

Many times it is going to take 4-10 years or longer to go through these various stages unless guys might be to front load their bitcoin investment in various ways, including potentially guys who might be reallocating some value into bitcoin from other investments that they might have had prior to coming to bitcoin.

To try to be structural in hypotheticals, a guy who invest 5% of his income into bitcoin will take 20 years to invest 1 year's of income into bitcoin, while a guy who invests 10% will take 10 years, a guy who invests 25% will take 4 years, etc etc... So we can see that there can be value for guys to attempt to front load their bitcoin investment, even though we also know that there are a decently large number of guys who struggle to even be able to invest into bitcoin at a rate that is 1% of their income so they will not be able to accumulate as much bitcoin relative to their overall income level, so they might be accumulating bitcoin most, if not all, of their lives, and they still might have some timeline targets to start to cash out their bitcoin, even though they might never reach a point in being able to completely live off of their bitcoin or to supplement a large portion of their cost of living with their bitcoin.

[Jody.Drummer]

I will admit that when bitcoin dip, it can fell tempting because people know that bitcoin is valuable and they want to now get it for lower prices.  But there is a cost for that. But nobody know when the market will fall. The price can fall very well today and tomorrow the price can retarce and go back to it previous price. Nothing is guaranteed, that is why it is pointless for person to think that dip is best time to buy.

Person who is just starting should have no business timing market , their priority should be how to increase the size of their Bitcoin stash by ongoingly investing using only their discretionary income instead of trying to outwit the market.

It's difficult to know when the market price will decline. So when the price is already falling what's important is to increase our purchasing power so we can accumulate more assets to invest in for the long term. On the one hand falling prices are good for those looking to buy but for those who have already accumulated a large amount it's sometimes not so profitable. They tend to buy when the market price is stable and hasn't yet declined. This is something they can't accept. However whether we accept it or not depends on the individual as market conditions are sometimes unpredictable making us always in a stable position when making purchases especially since we certainly don't profit from the current price decline.

If we knew when the price would drop and how long it would stay at its lowest point, we would all be rich, but the fact is that even professional analysts cannot predict with 100% accuracy when the price will drop. Guessing prices is like wasting time and making you more stressed. In my opinion, the best solution is to change your perspective from price to the number of coins. Bear market is a harvest season for those who have cash.
If you want to get an average price when buying regardless of price increases/decreases, start implementing the DCA strategy. Even if you don't feel like you're profiting from the current price drop, you're profiting from the amount of assets you've consistently accumulated before the price rises again.

Of course it is a very good thing if we really know the movement of the fund market as you say we will be rich because we know clearly when to buy and sell but yes I agree with what you say even a professional analyst does not know clearly the movement of the market accurately. What I think is when an investor focuses on the price it's more like trading instead of investing and yes this can make him stressed because the market price tends to miss our own predictions. The thing that must be emphasized in investing is buying and maintaining it, especially if the strategy used is the DCA strategy which of course buying consistently is the right support for long-term investment.

[Emjay24]

Of course it is a very good thing if we really know the movement of the fund market as you say we will be rich because we know clearly when to buy and sell but yes I agree with what you say even a professional analyst does not know clearly the movement of the market accurately.

Being concerned with knowing when to buy and sell is the behavior of a trader and not that of an investor. With DCA you don't need to have a specific time to buy, you're expected to buy consistently irrespective on price and keep stacking until you achieve you're accumulation target. If you're entertaining thoughts of buying low and selling high, then you're getting it all wrong, you cannot know if the market would actually touch your expected low price and it it doesn't, you keep waiting and missing out on opportunities to keep expanding your portfolio and you might even end up with fewer coins on the long-run. If you keep capping profits from your portfolio anytime the price goes high, then you're depreciating it and not showing it to grow well. These actions would jeopardize your investment journey on the long-run because you're acting more like a trader than a serious investor.

The best approach is to keep buying and holding, don't sell your coins prematurely, it's better to go long-term in it and initiate sustainable withdrawal strategies when you've arrived at a large enough stash that you can live off it.

[samadam007]

Being concerned with knowing when to buy and sell is the behavior of a trader and not that of an investor. With DCA you don't need to have a specific time to buy, you're expected to buy consistently irrespective on price and keep stacking until you achieve you're accumulation target. If you're entertaining thoughts of buying low and selling high, then you're getting it all wrong, you cannot know if the market would actually touch your expected low price and it it doesn't, you keep waiting and missing out on opportunities to keep expanding your portfolio and you might even end up with fewer coins on the long-run. If you keep capping profits from your portfolio anytime the price goes high, then you're depreciating it and not showing it to grow well. These actions would jeopardize your investment journey on the long-run because you're acting more like a trader than a serious investor.

The best approach is to keep buying and holding, don't sell your coins prematurely, it's better to go long-term in it and initiate sustainable withdrawal strategies when you've arrived at a large enough stash that you can live off it.

I don’t know why most people just make investing harder for themselves than it should be, by changing their strategy any time the market move. A simple solid plan combined with patience to stick with it can make a big difference over years. Just continue to make responsible decisions consistently.

The good thing about focusing on a long term BTC accumulation is it’ll gives you more time to focus on things you can actually control. Surely, you can’t control price fluctuation or future market outcome, but you can control your savings, how regular you buy, and whether you stay disciplined

[Stive009]

Of course it is a very good thing if we really know the movement of the fund market as you say we will be rich because we know clearly when to buy and sell but yes I agree with what you say even a professional analyst does not know clearly the movement of the market accurately.

Being concerned with knowing when to buy and sell is the behavior of a trader and not that of an investor. With DCA you don't need to have a specific time to buy, you're expected to buy consistently irrespective on price and keep stacking until you achieve you're accumulation target. If you're entertaining thoughts of buying low and selling high, then you're getting it all wrong, you cannot know if the market would actually touch your expected low price and it it doesn't, you keep waiting and missing out on opportunities to keep expanding your portfolio and you might even end up with fewer coins on the long-run. If you keep capping profits from your portfolio anytime the price goes high, then you're depreciating it and not showing it to grow well. These actions would jeopardize your investment journey on the long-run because you're acting more like a trader than a serious investor.

The best approach is to keep buying and holding, don't sell your coins prematurely, it's better to go long-term in it and initiate sustainable withdrawal strategies when you've arrived at a large enough stash that you can live off it.

I agree with your main point. I think the biggest plus point of doing DCA is that it shifts our focus from worrying about where the next candle will go to the habit of accumulating regularly. Because let's face it, none of us can accurately catch the bottom and top of the market. Another big thing is that many people do not calculate the unwritten cost of waiting. Many people sit with money in their pockets for months, hoping to get it at a slightly lower price. But what if the market is no longer at that desired price? Then they not only lose a good entry point but also miss the opportunity to accumulate Bitcoin with a calm mind during that entire time. In the long run, it matters much more than whether you were able to buy at a 1-2% lower price or not, how much Bitcoin you were able to accumulate in total.Similarly, this tendency to repeatedly take profits when the market rises a little does not match the main tone of long-term accumulation. It may be nice to see a few dollars in profit in the short term, but selling every time means reducing the amount of Bitcoin you have from the huge potential in the future. If your main goal from the beginning is to accumulate Bitcoin, then the real wisdom is to stick to your plan without reacting to every small shake in the chat. In my eyes, the real magic of DCA is not hidden in buying at the perfect price, but it creates a perfect habit that can be continued equally in all situations, whether it is a bull market or a bear market or a dull market that has been stagnant for months. At the end of the day, those who succeed are those who do not try to beat the market at every step but create a practical plan that can be maintained with a calm mind for years, in line with their real life.

[Jostern]

Being concerned with knowing when to buy and sell is the behavior of a trader and not that of an investor. With DCA you don't need to have a specific time to buy, you're expected to buy consistently irrespective on price and keep stacking until you achieve you're accumulation target. If you're entertaining thoughts of buying low and selling high, then you're getting it all wrong, you cannot know if the market would actually touch your expected low price and it it doesn't, you keep waiting and missing out on opportunities to keep expanding your portfolio and you might even end up with fewer coins on the long-run. If you keep capping profits from your portfolio anytime the price goes high, then you're depreciating it and not showing it to grow well. These actions would jeopardize your investment journey on the long-run because you're acting more like a trader than a serious investor.

The best approach is to keep buying and holding, don't sell your coins prematurely, it's better to go long-term in it and initiate sustainable withdrawal strategies when you've arrived at a large enough stash that you can live off it.

I don’t know why most people just make investing harder for themselves than it should be, by changing their strategy any time the market move. A simple solid plan combined with patience to stick with it can make a big difference over years. Just continue to make responsible decisions consistently.

The good thing about focusing on a long term BTC accumulation is it’ll gives you more time to focus on things you can actually control. Surely, you can’t control price fluctuation or future market outcome, but you can control your savings, how regular you buy, and whether you stay disciplined

People who have experience with investing in Bitcoin, would probably tell you that sometime you will have to make adjustments with your investment plans, considering that you have a more improved cashflow you would also want to keep buying more in a comfortable price, you might want to increase the amount that you’re using in buying bitcoin, perhaps you come across a dip, and you have some money to buy a dip would you not take the opportunity of having more bitcoin in your possession, everyone would still be responsible for their bitcoin investment, no matter what strategy they are using, the most important thing is buying bitcoin and consistent accumulation of bitcoin.

[Bigjoe33]

Of course it is a very good thing if we really know the movement of the fund market as you say we will be rich because we know clearly when to buy and sell but yes I agree with what you say even a professional analyst does not know clearly the movement of the market accurately. What I think is when an investor focuses on the price it's more like trading instead of investing and yes this can make him stressed because the market price tends to miss our own predictions. The thing that must be emphasized in investing is buying and maintaining it, especially if the strategy used is the DCA strategy which of course buying consistently is the right support for long-term investment.

I think you sound a bit confused and/or contradictory in your speech.

Firstly, you saud it's a good thing that we really know the movement of the market, so that we will know clearly when to buy or sell. And then thereafter, you now agree with the previous speaker that even professional analyst do not know clearly the movement of the market.

So, which do we go for huh?

The price of Bitcoin is always fluctuating, sometimes appreciates and sometimes declining, and thats why its best we do not pay attention to the market price but rather buy at any price so long as we are able to figure out what our discretionary income is, using the DCA strategy. Paying attention to the market price before buying, and/or selling some of our assets when the price increases to make some gains are the characters of traders who a more concerned about little gains. Of course, you can't build a nice Bitcoin portfolio with such attitude. Buying within your means, HODLing for long term is a better approach to Bitcoin investment

[ruykeri]

People who have experience with investing in Bitcoin, would probably tell you that sometime you will have to make adjustments with your investment plans, considering that you have a more improved cashflow you would also want to keep buying more in a comfortable price, you might want to increase the amount that you’re using in buying bitcoin, perhaps you come across a dip, and you have some money to buy a dip would you not take the opportunity of having more bitcoin in your possession, everyone would still be responsible for their bitcoin investment, no matter what strategy they are using, the most important thing is buying bitcoin and consistent accumulation of bitcoin.

Yeah DCA can be adjusted according to cashflow. If someone's discretionary income increases, then it is reasonable to increase the DCA amount and buy bitcoin accordingly. And if someone's responsibilities increase and expenses suddenly increases, then the DCA amount can be reduced. However, it is better to get out of this kind of thinking that if you have extra funds, you have to buy it when you see a big dip in the BTC market. Because in the bitcoin market, there is no way to accurately understand which is a big dip or which is a small correction. So, there is no rule that if you have extra money, depending on the short-time price movement, you have to invest the entire amount with that little dip. If the price of Bitcoin suddenly decreases in the market, then it is more convenient to add extra funds to the DCA amount and increase the DCA amount regularly. Because if you buy Bitcoin with all the extra funds after seeing a small dip, later if the price of Bitcoin continues to decrease, you will regret it. And if you can do DCA regularly by increasing the amount a little, then it will not cause any mental instability. One thing that all investors should follow is that you should not skip your continuous DCA while doing dip buy. The base strategy for Bitcoin buying should be DCA method.