This past few days, I’ve found myself weighing several options on whether to play safe with my finances or dare to risk. I’ve done the risking before but foolishly and that didn’t end so well.
Regardless, two things remain correct no matter what.
One is that the more you risk the more you’re likely to earn. I say likely because risk comes with uncertainty and there’s no real guarantee that whatever you’re investing in will pay. Just like you could profit, you could also lose. And huge.
The second correct thing is that people who don’t risk much, don’t make much. The difference between a lot of the big names we hear and the common person or average well-to-do people around is their ability to take risks. We all love our money, but you have to love making more money enough to dare to lose what you have in order to make more. Of course this is in no way giving a thumbs up to reckless risk taking, but just iterating that there’s no reward without risk.
The past few days, I’ve been doing a lot of thinking whiles I’ve been offline and one of the things I kept circling back to was a decision between betting on volatility for more profit or playing safe and earning smaller profits by diving into stable coins like HBD.
Like I always say, volatility is a double-edged sword. Just as it can make you profits, you count your losses with it too. Traders have a love hate relationship with volatility.
I pondered over what form I would take a loan in if I could choose a volatile coin and a stable coin. I’m just going to go ahead and think out loud here.
The market is down right now so I have the belief that if one were to take a loan to repay on a later date that was far from today, the market would’ve moved up by then. Leveraging on that, it seems like taking a loan in stable coin and buying a volatile coin to hold for that term will be a wiser alternative. Of course, this doesn’t completely eliminate the chances of loss, because it’s just speculation and the market could still dip further by whatever time the loan is due to be paid. My thinking here simply was that if I took say a 500USDT loan and bought Hive with it at $0.4, I’ll get around 1,250HIVE. Hold or invest that for maybe 6 months and if Hive goes up by as much as 10cents, I’ll be making $125 (25% profit).
On the contrary, if I took the 500USDT in HBD form so as 500HBD and decided to keep it in HBD form as a “safe” investment in savings form for 20%APR, then chances are that I wouldn’t be making as much profit as if I let the investment be subject to volatility. Not forgetting that since it’s a loan, I’ll obviously have to pay interest on it as well, and when all is done with, yeahh not so much left for poor Hamza.
Then again like I said, riding on volatility is strategy for the mentally prepared. The baseline basically draws that volatile investments are the best for profit-oriented individuals with the stomach for risk.