1% is certainly a good conservative number. If you don’t have ANY other risky assets at all in your portfolios, you could even move to 2-3%. Remember these allocations expect you to rebalance. If you have 2% in bitcoin and it gets back to $20k, you now have over 6% in bitcoin. You need to take some profits and move them into your other investments to avoid being over exposed to bitcoin.
When and how often to do that is an unanswered question for crypto. I do it annually with mutual funds. Some people do it quarterly. When you own specific stocks, you might set price targets. With crypto, no one knows what might work. And it moves much faster than any other asset class.
New world order, Wild West, and even maybe the Emporer’s new clothes and all that.
#20 is my favorite. Good stuff there.
There are a few things you should know:
- Bitcoin is one of the most speculative assets out there. Prices are likely to swing widely. If you decide to ‘invest’, make sure you have the stomach for it.
- Forget about getting rich quickly. Most likely it won’t happen to you.
- Beware of groupthink and self-proclaimed experts. Youtube videos, Reddit comments, and Stocktwits can all be very entertaining and sometimes educational, but the last appropriate source of investment advice.
- Don’t think you’re late to the game and you have to buy bitcoin now. Acting based on panic thinking the price will climb to $100K is foolish. What would you do if you knew the price would move the opposite direction to $100 instead?
- Don’t spend more than you can afford to lose. Invest only your ‘play’ money: the money you spend on stuff you don’t need. This is not meant to be a replacement for your retirement / 401K.