worthit wrote: ↑Tue May 11, 2021 3:29 pm
banook wrote: ↑Tue May 11, 2021 1:48 pm
worthit wrote: ↑Tue May 11, 2021 11:40 am
I hear you watchnerd. I went through it once and came to the same conclusion. Lumpsum is the way to go but a lot of folks are suggesting DCA.
Why do think DCA is a bit safer than LSI? Can you elaborate please?
Certainly back in 2017, LSI was not the way to go for me - but I did. Call it a failure/learning. I LSI'ed into BTC back in the first run/mania. It was. An experience. LSI can be a "safer" less bureaucratic route - fewer rows on the csv - for some people. I am not knocking it. But even if I view crypto as a hobby/sandbox now, the DCA behavior might have been engraved by that experience/feelings at the time. I can say similar things about other hobbies, where I bit off more than I could chew the first go round (at least 2 real world analogies of "I'm never doing that again" outside of crypto, and "next time I will do this"). Even if you did the math for me on my own "investment" here - and showed me LSI vs DCA if held for period X is equivalent, I'd not give in to this rational information. It's DCA behavior because of 2017.
Thanks. Makes sense.
I was just wondering if there was any evidence based data out there. Couple of my friends who are big time believers and owners of crypto have had the same experience. Very interesting.
I admit fully that this is not evidence-based but my personal take:
- If it was any old stock, bond, or even a leveraged fund, I would lump-sum without hesitation. The volatility is just not that bad. In fact, from what I recall, there were already studies on it being better for the usual types of assets (BTW: does anybody have that study, handy?)
- with what I've seen in the crypto space, in my mind, there is a much higher probability of lump-summing burning you when something goes up 20% one day, then drops 10%, then goes back up 10%, spikes, then crashes... you get the point... This isn't just crypto; anything that would be so extremely volatile in short spans would be eligible.
This just compounds when I am actually closing one stock position in order to open new ones in crypto. Not only can I get burnt on selling the stock, but I can get burnt on the crypto purchases. I exaggerate a bit with the "burnt", but I feel like you get a more "in-the-middle" price in both directions, instead of potentially getting highs or lows.
Instead, I ease out of the stock as we stay around earnings, and ease into ETH + BTC ETFs (FYI: investing from Canada).