In my last post, I wrote about the importance of separating savings from investment.
In this post, I shall share how and why I HODL. Really, it's more about how I perceive my crypto investments. Hopefully, you will find this perspective useful, at least in stimulating your thinking.
The farmland
As I write this post, an image of some kind of farmland surfaces. I don't actually own any farmland, but I can appreciate how old-fashion traditional farmers value them. Once they acquire it, they don't sell it lightly. To illustrate this point, I can relate to a character from the novel The Good Earth by the name of Wang Lung who held on to his land because he thought it is important for his family to have it perpetually.
I am inspired by Wang Lung's tenacity!
Digital farmland for crypto yield
In the digital age, instead of hodling farmland, one can hodl crypto assets instead. Hopefully, they are assets that will reap substantial returns continuously, much akin to the way crops grow from the farmland perpetually. The owner benefits from it so long as they own it. Blockchain tokens can be thought of as digital farmlands for owning!
It is with this thinking that I am treating my highly selected crypto assets. That is, I hodl them because I believe they will yield returns perpetually. For example, certain POS tokens have staking rewards. Buying them now when they are just starting is relatively cheap. Although the small unit price also meant that staking them earns me rewards that is meager at the moment, but if the blockchain project survives and achieves high adoption, the tokens I own would become hot property that is priced out of reach of newcomers later.
That could be like owning digital farmland that gives me lucrative perpetual returns, say in 10 years.
Being realistic and keeping in check
Having said that, I am also careful not to be overzealous about particular projects. Think Luna-Terra.
Anyway, after doing some budgeting, and careful assessment of the project, I would set a target number of tokens to stack. For example, I mentioned that I wanted to acquire about 33K LEO so that I can provide a consistent 1 LEO upvote value in my curation. At the moment, I am not sure if that goal is realistic or worthy. But, if one day 1 LEO is worth USD 1, I think 33K LEO would be pretty expensive for me even then. The utility of 33K LEO could be crazy in 10 years if LeoFinance scales. So it is better to set a goal and try to achieve it soon. At the moment, to me it is meaningful digital farmland to own.
Once that goal is achieved, I take that as prized property or farmland successfully own. I am not going to sell that, as my long-term projection is already on it. It is for the long term!
Neither would I want to acquire more of it (unless fundamentals change). For the sake of diversification, I could set a target for other tokens and acquire them next. And the process repeats.
The idea is to research on worthy projects at the start of the crypto/blockchain revolution and then acquire them early enough. The amount need not be huge. But the decision to acquire needs to be sound.
The journey would be bumpy
Of course, the journey would be bumpy, and the tendency to sell off at a loss is real when the going gets tough. That's why it is important to be modest, and realistic; investing after savings is set aside.
In this bear market, I would take it slow in my DCA. Making sure that I take care of other responsibilities too.
But I will get there.
P/S: This is not financial advice, and please do your own due diligence before investing.
If you read this far... and if you are a like-minded Hiver who is on the path to learning more about Hive and crypto investing, and if you like to be tagged when I write such posts, I welcome you to leave a comment below and let me know. We can form an alliance to support each other's growth.
You might be interested in this post, @jacoalberts!