Investment Challenges and Solutions

[Gozie51]

I went through this article and find it interesting and decided to share here to help someone who perhaps having been looking for how to work through the challenges and so, you could be interested on any item on the article. Personally, I find number 3 and 4 interesting.

For number 3, it is certain that capital is usually a challenge for start ups and you can look up solution according to the article. For number 4, sometimes we think diversification is a sure way to increase capital and wealth or way forward against inflation. But if we diversify wrongly, we will end up servicing our debt for what we have diversified into. In other words, it is better to cut down on numerous diversification that is not yielding profit and then make a priority from what we have diversified into.

I hope we gain alot from this article.

3. Limited Capital to Invest
Challenge
Another challenge that new investors face is having limited capital available to invest. This is only compounded when specific financial instruments are too expensive.




Solution
This challenge can often be solved by looking into fractional shares.

Fractional shares are partial shares of a company’s stock. Rather than holding one or more full shares, you own a fraction of one.

 

Back then, brokers only allowed total shares to be purchased, and investors ended with fractional shares only after a company split.

 

However, this is changing as significant brokerage firms make it easier to buy fractional shares directly. This change allows you to specify how much money you want to invest in a company instead of how many shares you want to buy, and you can buy a tiny piece of a share if your financial investment isn’t enough to buy a whole one.

 

When you purchase a fraction of a share, you’re treated the same as if you had purchased the entire share. You make the same percentage gains and enjoy the same stock ownership privileges. However, you’re also at risk of loss.

4. Too much diversification
Challenge
Diversification is a strategy where investors buy various assets to reduce the chance of losing out on significant gains while also lowering losses.

 

Investors diversify their holdings among various companies, industries, countries, and asset classes rather than putting all their money in one company or a small number of assets.

 

However, if you’ve done too much diversification or done incorrectly, you might not lose much, but you won’t gain much either. You might also take on more risk than you anticipate, or you might pay excessive fees.

 

Solution
The best solution to avoid over-diversification is to keep your portfolio to a manageable level.


For some, this means only keeping their top ten investments, as long as they’re in different industries.

 

Others avoid over-diversity by reducing their holdings in particular sectors (e.g., volatile materials producers or industrial stocks, or difficult-to-understand sectors like biotechnology stocks) for diversification.

[Ruttoshi]

It's better not to diversify, if you don't have the proper knowledge of the asset which you want to diversify into so that you don't regret your actions. Diversifying is for those who think that it's a risk to invest only in one asset. For this reason, they will prefer to spread their wealth into two or three assets so that if one isn't doing well in the market, the other one can balance the loss.

However, you don't invest in bitcoin and diversify into shitcoins because they're of the same line of asset and bitcoin remains the king of cryptocurrency. When diversifying, it good to diversify into a different type of asset like god, bond or stock.

[Ziskinberg]

True, capital really is the biggest hurdle when starting a business.
Back when I was in the corporate world, I already had the idea of starting one, but my salary was so small, it wasn’t even enough to give my family a comfortable life.

That’s why it was always in my mind that I needed to build something to boost my income.

Luckily, I discovered Bitcoin and found some opportunities there. What I earned back then, I used to start a business, which is already running now.
If I hadn’t found Bitcoin, honestly, I might still be stuck in the corporate world today.

[tbct_mt2]

It's better not to diversify, if you don't have the proper knowledge of the asset which you want to diversify into so that you don't regret your actions. Diversifying is for those who think that it's a risk to invest only in one asset. For this reason, they will prefer to spread their wealth into two or three assets so that if one isn't doing well in the market, the other one can balance the loss.

However, you don't invest in bitcoin and diversify into shitcoins because they're of the same line of asset and bitcoin remains the king of cryptocurrency. When diversifying, it good to diversify into a different type of asset like god, bond or stock.

In blockchain industry and cryptocurrency market, Bitcoin is the best, the strongest and a most profitable cryptocurrency since 2009. Altcoins have big risk of failure, abandonment, death and if your portfolio diversification falls into such altcoins, you will lose 100% of your initial capital.

There are altcoins that can provide very good ROIs in short term but the challenge for altcoin investors is they don't know where to exit, when to escape an altcoin train and most of them stuck. Another risk is falling in love with altcoins and after exit from one altcoin project with good ROI, they will hop on boats of other altcoin projects that are failed ones.

In cryptocurrency market, to recap, if you are unsure what to do, only invest in Bitcoin.
A next important point is, choose a good wallet to store your bitcoin, make your wallet backup properly.

[rachael9385]

It's obvious that capital is challenging to some people just like you have said, many beginner in the crypto space also find it hard to get capital to start their investment, I believe that some of us uses loan money to purchase Bitcoin. But from my point of view, if you don't have good knowledge about Bitcoin there's no need to take a loan to purchase Bitcoin.

[cryptoaddictchie]

The idea of diversification is easy to understand once you dyor potential money out of it then ita good. Its fine to use diversification but this is a long game some users are not fit for this criteria especially if they play memecoin or touching this since its risky. But for me, Id able to spread my asset to a good maneagble level not too short but not to over invested too.

[tbct_mt2]

The idea of diversification is easy to understand once you dyor potential money out of it then ita good. Its fine to use diversification but this is a long game some users are not fit for this criteria especially if they play memecoin or touching this since its risky. But for me, Id able to spread my asset to a good maneagble level not too short but not to over invested too.

You can not win a long game if you lose in a short game because people who have bad management of risk and capital, will lose nearly all capital in short term games. With big losses or all capital loss, how do they continue to have their long term games and succeed with those games?

Diversification or not, you decide and trading or investment, it's up to you too but make sure that you have your main capital in Bitcoin investment. Reason is Bitcoin will help you getting profit in long term that can cover your loss from portfolio diversification or trading.

https://www.bitcoinmagazinepro.com/charts/bitcoin-profitable-days/

With time and loss from diversification and trading, you will realize a big fact that Bitcoin is your golden chance to get rich safely.

[Zaguru12]

For number 4, sometimes we think diversification is a sure way to increase capital and wealth or way forward against inflation. But if we diversify wrongly, we will end up servicing our debt for what we have diversified into. In other words, it is better to cut down on numerous diversification that is not yielding profit and then make a priority from what we have diversified into.

I wouldn’t talk about capital be capital almost everyone knows the implications of a limited capital. There are many bitcoin investors today that might have caught some bitcoin lows but they lack capital to actually invest in it then and that’s why as someone who limited capital DCA whenever you have means should be your strategy to help you accumulate more at different price.

As for diversification, I will say the article seriously had the right things in it, most people run into loss trying to diversify because what they should have done was to simply add up to their initial portfolio or keep the one they have instead of investing into it. Example is cryptocurrency investors who have already had the mindset that Altcoins pump higher than bitcoin and they end up investing into this coins and we all know what happens after a long run.

Take for example Ethereum and bitcoin, when bitcoin was pumping during the pre halving periods last year due to the ETF approval hype then some investors took profits on bitcoin and invested the amount into Ethereum because it was having its own ETF talks, then bitcoin was around $45k while Ethereum was above $2k. Run down to now bitcoin has done more than 2x from that position and Ethereum has dumped from there. If the money was used to actually accumulate more bitcoin or the bitcoin profit taken was left untouched the profit will have been 2x now, but wrong diversification has had those investors servicing their Ethereum losses now.

As a bitcoin investor, your diversification should be outside cryptocurrency instead, any crypto coin bought as a diversification option is just a gamble

[Mpamaegbu]

The idea of diversification is easy to understand once you dyor potential money out of it then ita good. Its fine to use diversification but this is a long game some users are not fit for this criteria especially if they play memecoin or touching this since its risky. But for me, Id able to spread my asset to a good maneagble level not too short but not to over invested too.

People diversify because they don't actually know which of their investment will be a winner. If people knew what investment would give the maximum, nobody would be trying their hands on several pies. We all would just heap it on the investment that would give us the highest ROI. Everyone loves to play safe and that's why we long for diversification as a way of saving our capital. Whether we DYOR or long term our investments, we truly can't say for sure that which will set us up there financially.

[Floxynice]

Talking about limited capital to invest, investing in Bitcoin has been made easy through DCA. Anyone who has a stable source of income will be able to invest in Bitcoin without having to labour for years to accumulate funds.

Although profits may not come immediately, investors can support themselves by having a source of income that will be able to pay their bills. It is a great mistake for anyone to quit their job because they are investing in Bitcoin. Bitcoin investment is a long-term venture that requires long-term planning.

[Solosanz]

Diversify only good if you diversify to good assets, if you pick wrong asset, it could make you in loss.

Imagine you invest in Bitcoin, you invest $1,000 when the price was $50K and sold it when the price hit $100K, now your money worth $2,000.

But, if you split $100 to buy Bitcoin, $100 to buy Ethereum, $100 to buy blue chip stock, $100 to buy cheap stock, $100 to buy gold etc, even Bitcoin and gold perform, the other assets might loss a lot.

Since my money isn't that huge and I familiar with Bitcoin, that's why I go for Bitcoin.

[Antotena]

It's obvious that capital is challenging to some people just like you have said, many beginner in the crypto space also find it hard to get capital to start their investment, I believe that some of us uses loan money to purchase Bitcoin. But from my point of view, if you don't have good knowledge about Bitcoin there's no need to take a loan to purchase Bitcoin.

It's not just the some people, the majority have issues with funding and that's why many people don't like to hold their coins for long term or become bearish the moment the market is shaky. The main challenge of crypto investment today is having the right coin that will gives you understanding of that particular coin that will give you the profits that will yield your portfolio and how many coins can we really have confidence to give us that rate of investment that we have in mind.

If there is money, I mean the capital I don't see any problems with diversifying much on coins as long as the weight of each coins you bought is significant. Look at the market today, if you have bought Bitcoin and some other altcoins since last year, Bitcoin is the only one left with that profit that hasn't washed away and despite the little correction, it look bullish. You can't really point out on a coin and have confidence that this coin will grow in the next few years, altcoins in general now suck.

[dzungmobile]

It's not just the some people, the majority have issues with funding and that's why many people don't like to hold their coins for long term or become bearish the moment the market is shaky. The main challenge of crypto investment today is having the right coin that will gives you understanding of that particular coin that will give you the profits that will yield your portfolio and how many coins can we really have confidence to give us that rate of investment that we have in mind.

You will be overwhelmed if your interest of research and investment is in altcoins. They are too many, in thousands and their projects have lot of promises than what they are able to do in reality. Their blockchains are weak, security is bad, exploitations can occur anytime. You can not know when a black swan event like Terra will happen with an altcoin.

Bitcoin gives you a safest option for investment, a most secured blockchain to use for storage and transactions.

[Jewan420]

The issue of capital is challenging for most people interested in investing. However, if there is a sincere desire, this challenge can be somewhat easier through hard work. Talking about capital is not my main purpose, it is a different challenge for each person.

I often emphasize diversification in business, because I will never agree to hold all my money in an uncertain market. Although I am in the initial stage of investment and I myself realize that I am not yet a qualified person to diversify in investment. Right now I am only limited to Bitcoin investment. But my future plans are to invest in 3 types of assets. One is crypto investment, the second is investment in real assets and the third is investment in business institutions that can give me profit in the short term. In terms of crypto investment, Bitcoin is my main investment and for diversification, I would like to choose some altcoins whose future is somewhat bright. Real assets include metal asset investment and real estate investment. I may even add more as time goes on. In terms of business ventures, my main focus will be on investing in the agriculture sector and investing in the food sector. An investor needs proper planning and waiting for an appropriate time to diversify his investments.

[348Judah]

I went through this article and find it interesting and decided to share here to help someone who perhaps having been looking for how to work through the challenges and so, you could be interested on any item on the article. Personally, I find number 3 and 4 interesting.

For number 3, it is certain that capital is usually a challenge for start ups and you can look up solution according to the article. For number 4, sometimes we think diversification is a sure way to increase capital and wealth or way forward against inflation. But if we diversify wrongly, we will end up servicing our debt for what we have diversified into. In other words, it is better to cut down on numerous diversification that is not yielding profit and then make a priority from what we have diversified into.

I hope we gain alot from this article.

We have to learn in other to know what to do regarding trading and investment, because we can't afford doing what is wrong and expect to have the right outcome of it, sometimes we may do this deliberately and in some situations, we don't even know what is at stake on the conditions required before we go into making an investment, that is why everyone of us must learn to know what is right to do and why we should take a particular step as being necessary for us to take while investing.

[Alphakilo]

To solve the capital challenge. Start small.

Ask your parents for a loan. Well this depends on your relationship with them. Some of them will be willing to do it. But you most have a plan to pay back if things don't work out. You deal with them to pay back may not be with cash but with something else.

If you have a hobby, monetize it and people will pay for it or rather social media websites may ask you to monetize it. Outside of social media once the skill is valuable people will pay.

Lastly, budget some amount monthly from your income to invest.

[moneystery]

4. Too much diversification
....

the idea of ​​diversification can sometimes be misleading to investors, as the article says, that when someone diversifies they may not get more than they would if they had chosen one or two specific assets. like in this case, when a novice investor starts investing in cryptocurrency, he starts with not much capital, but because he read that diversification can reduce risk, he starts investing in more coins, when in fact he could have done it on bitcoin alone and gotten a bigger profit potential compared to diversifying it on more shitcoins.

[Die_empty]

To solve the capital challenge. Start small.

Ask your parents for a loan. Well this depends on your relationship with them. Some of them will be willing to do it. But you most have a plan to pay back if things don't work out. You deal with them to pay back may not be with cash but with something else.

If you have a hobby, monetize it and people will pay for it or rather social media websites may ask you to monetize it. Outside of social media once the skill is valuable people will pay.

Lastly, budget some amount monthly from your income to invest.

That's exactly my suggestion when it comes to seeking for capital to funds a business. People want to wait till they get all the money they need before the start a business. But they fail to grasp that every business can be started in a small scale. I am not even of the opinion of borrowing money to start a new business because it could be risky. Maybe taking loan for expansion is more convenient for me.

When it comes to diversification it is important to do comprehensive research. The richest man in my country is almost involved in all sectors ranging from agriculture, building and construction, technology, education, etc. So as investors we should identify areas with less risk, reliable and reasonable profits. Don't always follow the trend or crowd, do your research before investing.

[Distinctin]

It's better not to diversify, if you don't have the proper knowledge of the asset which you want to diversify into so that you don't regret your actions. Diversifying is for those who think that it's a risk to invest only in one asset. For this reason, they will prefer to spread their wealth into two or three assets so that if one isn't doing well in the market, the other one can balance the loss.

However, you don't invest in bitcoin and diversify into shitcoins because they're of the same line of asset and bitcoin remains the king of cryptocurrency. When diversifying, it good to diversify into a different type of asset like god, bond or stock.

Diversifying is only for those who want to secure profits from different sources, but generating profits will only be possible if you know well how to make that investment work and progress. Otherwise, if you only diversify for the sake of profits alone, you aren’t securing profits, but you are only wasting your money and time trying to diversify on which you aren’t familiar at all.

If that’s the case, just stick to bitcoin instead. At least your full focus is only on bitcoin, so you can maximize its full potentials and increase your future profits in time.

[serjent05]

Among the list on the article, I found the first one to be the most crucial in a successful investment.

1. Unknown risks in Investments
Challenge
Not all investors know the risks involved in investing, particularly with new investors unaware of the hidden risks in various seemingly simple investment strategies. This can result in significant losses in their portfolios early on in the process.

As many adviser stated, knowledge is power.  It is very important to know every step of the investment.  One must not neglect the information about the risk involve, and at the same time the information on how to tackle this risk.  So before anything else, we must learn our investment thoroughly and shoul always know the contingency plan if some challenges arise.