An old investment method that works well for long-term crypo investments

[okbit]

There is an old, proven investment approach that has worked well for me in long-term altcoin investments.
I have been investing for over 40 years, in stocks, commodities, forex, and first used this approach with stocks.

The concept is called dollar-cost averaging. Nothing new, been around for years, but I think it is the best way to invest long-term in crypto and take advantage of the volatility.

Basically you invest the same dollar amount (or Euro, or any other fiat) at a chosen period.

For example you invest $10 a day in your favorite coin(s). You purchase exactly $10 of the coin(s), each day. When the price is high, you get less coins, when it is low you get more. What this does over time is significantly lower your average price per coin.

With stocks, we bought once each month. With the volatility of cryptos, I invest once each day. With bitcoin, I have been doing this a long time, so when the price was $1200, I bought very little, now with the price at $350 I can get more each day, and my average price per coin, remains low.


So how do you you apply this to cryptos?

1. Pick you favorite 2 - 4 coins. Coins that have been around long enough, that you believe in their long-term value.
2. Pick your investment period - once a day, once a week, etc.
3. Pick your periodic amount - $1, $10, $100, whatever your budget.
4. Purchase exactly that amount, every period. Don't play the market, don't second guess, just the same amount every period.

If you are right about the long-term story, you will accumulate a lot of coins at the best price, and avoid getting killed because you bought in at the highest price. And even if the price does not recover to its highest record price, like BTC at this point, you can still make a profit.


The coins I invest in this way are:

Bitcoin - because it is the undisputed leader
AppleByte - because it has steady price growth, good volatility, and is building a long-term user base
Doge - With the paypal deal, it is here to stay, and has the most loyal community of all alts.

What are your top choices?

[BitcoinNational]

UNO -- low rate of mint production, community strong, asset backed [sha pow]
CGB -- super low rate of mint production POS protection [scrypty pow/pos]
DMD -- low rate of mint production POS protection ALT algo [grs pow/pos]

[e-coinomist]

Not picking coins, but technology.

Means if you allready got Bitcoins, is there any reason to fetch Litecoins too? Maybe as a hedge, but then you allready stocked up enough in this field.
Cryptonote coins are another codebase. Picked XMR and BBR.
Then some of the mixer based coins that focus on anonymity.
Last comes coins that promise to get in touch with real trade, hinting at the URO (besides I still believe that one is a scamm).
Still considering concepts that use a new approach on mining. Staking, HDD mining, such. Just Microcaps are much research work and little volume.

This list is not complete. If you can think of "a class of it's own" coins, feel free to expand on my list.

Your approach totally did not mentioned selling coins. You need two sides of the same coin. Sometimes maybe it is the better investment approach to sell like 10$ a day?

[Zer0Sum]

The concept is called dollar-cost averaging. Nothing new, been around for years, but I think it is the best way to invest long-term in crypto and take advantage of the volatility.

Dollar cost averaging is very simplistic and not a magic bullet...
And does not increase the expected return of an investment portfolio...
But it does increase volatility and risk of ruin.

Dollar cost averaging works best with blue chip stocks in a long-term bull market...
So it creates an illusion of effectiveness.

Conversely...
Dollar cost averaging works worst with junk stocks or crypto because many of these securities GO TO ZERO.

A much better approach to crypto is to know when to GET THE HELL OUT of a coin...
You have to learn the signs of an inevitable Death Spiral...
As opposed to buying a dead coin all the way down to zero.

[UnicornFarts]

http://www.reddit.com/r/Buttcoin/comments/2kh8gl/buttcoiner_realizes_that_dollar_cost_averaging/

[Rw13enlib88]

1. Pick you favorite 2 - 4 coins. Coins that have been around long enough, that you believe in their long-term value.

What are your top choices?

I like the strategy. But i would pick 10-20 coins. It's dificult to find the good ones (new technology) but it deserves.