Investment Strategies, Time Frames & Maturation

Strategy Alignment
If you are like me, discovering the concept of investing and passive income was a game changer. Why do I use the term “discovering”, as I am sure everyone has heard of investing and passive income? Knowing about something and being dramatically impacted by something are two very different scenarios. The moment you realize the potential power of investing is the moment you discover that it has the ability to change your life. Without this personal revelation, investing will most likely always be something somewhat foreign to you.
However, having such a revelation, or epiphany, is not enough. How you go about putting this idea into action is of vital importance. When I first embarked on this journey many years ago, I made all the usual mistakes. Being consumed by a new passion, I tried to allocate more to investments than was comfortably possible. That being said, I believe that living as a minimalistic in order to maximize your investment allocations is a great move.
Exercising frugality can really enhance your portfolio and help you reach your goals a lot faster. Choosing to cut away from your lifestyle to bulk up your portfolio is an approach that is likely to produce impressive results. However, as with anything, it’s easy to go overboard, and that’s what I did. Establishing a healthy yet strict ratio is vital. You need to ensure that despite having hefty allocation responsibilities, you are still able to live and afford a moderate lifestyle.
Time Horizons & Maturity
Most investors tend to think in years. However, this is not always the best approach, especially in Crypto. Even though the general idea of multiple years is definitely a good idea, this needs to align with market conditions. This is most important. For instance, someone who began investing in Crypto in 2020 and had a timeline of three years would have performed better had their timeline only been a year. This can be directly linked to market conditions.
Simply choosing a predefined time frame is not good enough. The specified time frame needs to lend itself to market conditions. A shorter investment time frame can outperform a much longer time frame, provided it fits market conditions like a puzzle piece. Don’t get caught up on time; even though longer is generally better, in Cryoto, it’s not necessarily the case. Even traditional stocks are affected by a similar dynamic. This leads to the “maturity” of an investment.
Choosing when to realize profits can be a very unique and personal decision. However, as with fruit, there comes a time when you can begin picking. Even though fruits are often consumed at various stages of the ripening process, there is an “acceptable” stage of harvesting. Choosing to harvest too early can be costly. Similarly, an investment needs to mature before harvesting profits.
Regarding Crypto, harvesting should always take place during cycle peaks. Choosing to hodl through a bear market only makes sense under very specific conditions and with coins that offer unique utility. You don’t need to execute a perfect exit and re-entry. All you need to do is to ensure you re-enter lower than you exited. Once a bear market gets rolling, it’s not that difficult. This is how many whales chose to build their holdings over time.
Final Thoughts
Of course, one can always take the more laid-back approach and simply hodl over multiple years. However, if you can discern the market relatively well, it’s perhaps not the best approach, as you are potentially missing out on additional portfolio growth. It’s important to plan and develop a strategy with all of these points in mind. Choosing simply to invest for X amount of years could end up costing you!
Investment ideas require thought and structuring. Having predefined points of execution can be a highly lucrative idea when it comes to managing your portfolio. It all depends on your goals, available capital, and general time horizon. Anyway, these are merely my thoughts and not investment advice. Hope to see you in the next one. All the best!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.