We all know the crypto market is volatile. But we weren’t prepared for the crash that started last week which saw US $1.4 trillion dollars wiped off the market in just a few days.
Despina Karp spoke to Dimitri Kondilis, an experienced financial planner from Soundbridge Financial Services on how to successfully ride out the crypto ‘winter’ without losing too much of your portfolio.
Thanks Dimitri! Should investors cash out during the crash?
Whilst investors turn to Bitcoin as a safe haven during stock market volatility, the narrative is no different when crypto is in a decline.
When in a bear market there is no point in cashing out, as the asset is just devaluing for the point in time and a long term view should be always taken.
How should investors navigate the dip?
Two good ways to ride out the dip are: firstly to make sure you hedge your position with assets that are income based. These provide a stream of cash through dividends. Big companies will continue to make money when their shares de value by focusing on a good mix of growth and income. This ensures that you will have a sturdy portfolio. Secondly, Investors should look at the massive opportunity cost of not being able to inject more capital into their asset positions when they de value.
Should you dollar cost average?
Dollar cost averaging is a strategy I advise most clients to adopt and this can be mirrored to the cyrpto markrets.
My injecting your surplus cash into the asset price when it is de valued, you will be buying on the dips and spreading the buy price.
Any last words of advice for crypto beginners?
I can’t stress this enough: Crypto should also be supported by a quality income portfolio, because when growth is not certain we can rely on income. So we need to stick to the fundamentals of investing in a bear market.
KEY TAKE AWAY POINTS:
- Buy the dip with the use of Dollar cost averaging cash into the market.
- Diversity! An age old story of don’t put all your eggs into one basket.
- Stick to an ideology of income from a currency or share as a constant.
- When advising my clients I use Crypto in some cases as an alternative , much like a satellite growth fund in a share portfolio. They have growth characterists.
- The core should be targeting on income to provide a hedge in bear markets, because when growth is not certain we can rely on income.
Contact Dimitri here:
(07) 49222624 for an appointment
Facebook: Dimitri Kondilis
