I cannot give financial advice. What I do is a strategy like this:
- Focus on strong quality investments using precise performance indicators. The problem with cryptocurrency is we do not have the same indicators but we do have some. Utility is one (this could be user satisfaction or the amount of happiness the product or service generates). Another is growth, which you can measure as new active users. Metcalfe's law determines worth based on growth of nodes, while utility tracks satisfaction.
- Focus on income generating assets. This is much harder in the crypto space and is the main thing missing. There is almost no place to park your wealth and have income be generated. If this existed then there would be a lot less panic.
Diversification is something I'm focused on. I think a lot of crypto people are only nervous because 100% of their net worth is in crypto. This is fundamentally risky and not necessary. Crypto function mostly like growth stocks, like owning shares in Google or Facebook, so you do not get any income stream like you can from real estate or dividend stocks. There is the exception (NEO) which does pay a sort of dividend though so anyone looking for dividends should look into that.
Bitconnect, I put my excess into it. Now I have no excess to trade with. This is the cost of making an unwise bet. Fortunately there are much safer investments but even the stock market is over valued. It requires a very VERY careful analysis (security analysis) to get into stocks when prices are inflated, but the good news is this crash in stocks may be one of the best times to get in.
Same with crypto, when it crashes if you have cash on hand it is the best time to get in. Dividends, rent, and other productive income generating assets will allow for a cash stash on the sidelines for moments like these. People who were wise enough to diversify into that can now buy up cheap stocks and cheap crypto.
In The Intelligent Investor, Benjamin Graham describes a Benjamin Graham formula he used to value stocks. The formula as described by Graham in the 1962 edition of Security Analysis, is as follows:
V = E A R N I N G S × ( 8.5 + 2 g )
V = Intrinsic Value
EARNINGS = Trailing Twelve Months Earnings
8.5 = P/E base for a no-growth company
g = reasonably expected 7 to 10 year growth rate
Where the expected annual growth rate "should be that expected over the next seven to ten years." Graham’s formula took no account of prevailing interest rates.
From the quote above you find the secret recipe aka formula: V = E A R N I N G S × ( 8.5 + 2 g ). This is a formula you can use in your spreadsheet to screen/filter stocks. Emotionless rational investing is by the math not by feelings.
Reference
I will implement this technique, I make mistakes but I’m learning from them . One day I’ll perfect it so I’m making profit .