MOON sentiment is rising to levels we saw in 2017, and I do agree that things are different this time, BUT as with any investment, you should always expect that ANYTHING can happen.
There WILL be another healthy sizable pullback. It’s a matter of WHEN, not IF. Could be today, tomorrow, next year or in 5 years. Odds are that it will be sooner, rather than later.
For the average person who can only spare a small percentage of their income, my advice would be to invest as below (or some sort of variation of the below):
- Dollar Cost Averaging (DCA) – Pick your favourite exchange and set up automatic buys. Daily, weekly, fortnightly, monthly – whatever you can SAFELY afford. You don’t want to feel like you have to sell at some stage if you are running low on fiat. Set and forget. HODL.
- Lump Sum Purchasing* – Take 25-50% of the amount you calculated for DCA’ing, and instead put it aside in an account for two reasons.
- Buying The Dip – Pretty self explanatory really. Buy when it’s cheap, to maximize your investment.
- FOMO Buying – FOMO happens to even the best of us, trust me. What matters is how you react to the feeling. In moments of FOMO (bull runs), you may be just a click or two from depositing ALL your money in, which could be disastrous if the price drops significantly. Instead, invest a smaller percentage of this fund to help keep your emotions in check.
*My personal rule with lump sum purchasing, is to always invest 50% of my fund, regardless of whether I’m buying the dip, or FOMO buying. If I buy at the All-Time-High (ATH) and it crashes, that allows me to buy the dip and average my cost down significantly. Vice versa, if I buy the dip and we see a bull run, it allows me to continue buying as the price goes up. By investing 50% of the value of my fund each buy, it typically never reaches $0.
Regardless of the above, the #1 rule is still to buy & HODL. As we continue to see ATHs, EVERYONE who has HODL has made money.