Investing Principles I Regularly Remind Myself Of

Principles are the foundation of our decision making. Having solid principles when it comes to investing is rather integral to success.

A few good Investing Principles

  • You have to be aggressive and defensive in investing

So what exactly does this mean? Basically, when the opportunity arises you must take big swings to make real money, but at the same time you need to make sure that if that swing misses it isn’t so big it knocks you out of the game.

  • You can never be more than 20% diversified within the same asset class

Easiest example – cryptocurrency. If you are only invested in crypto then your risk (and reward) is a minimum 80% tied to that market now matter how many cryptos are invested into. Yes, there can be a couple outliers that buck the trend, by the majority track the market.

  • The trend is your friend

This is probably one everyone has heard, but it still hold so true. Think about the past two months in crypto; every time we tried to buy a bounce we were left disappointed because the rallies would fail being we were in a clear downtrend. Recognize the larger trend and invest in that direction, why fight the current?

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