Investors following DCA split the investment pool and buy assets at regular intervals of time. DCA is a straightforward investment strategy that works irrespective of the current price of an asset. The entry point A proven method of managing entry points is to do Dollar Cost Averaging ( DCA). ‘Invest and forget’ is a better strategy than worrying about daily patterns. For example, when a tweet from an influencer doesn’t swing the momentum, timing the market with short trades is mostly harmful. Until the market hits a particular maturity. These indicators, however, serve as a compass rather than as the holy grail. Traders use technical analysis to predict future patterns of a coin depending on its historical performance, trade volumes and other indicators. In the crypto world, long term investors are more likely to gain wealth than short-term traders. Crypto assets follow cycles and compound over time. Building wealth over time Building wealth is about patience as much as it is about timing the entry.
Strategies vary according to individual goals and risk appetite but the following approach works in general even for amateurs. We continue to advise investors to only invest a minor share of the overall portfolio (up to 3 per cent) in cryptocurrencies. However, managing risk is possible and within everyone’s reach. The crypto market is notoriously volatile with as much as 30 per cent variance in prices within a day. More than one crore Indians have already embraced cryptocurrencies with a 600+ per cent growth in cumulative investments in the last one year, according to Chainalysis, a leading compliance provider.įor those ready to dip their toes into the cryptocurrency world, discerning the best time to invest is key. It is a nascent, decade-old market with potential to grow multi-fold over the next few years. The global crypto market runs 24x7 with equal access to all investors without a bias for geography or nationality. Enter cryptocurrencies, a new asset class with high potential, accessibility and with possibilities of managing risks. Beating inflation with low risk assets alone is proving difficult in the post-pandemic world. Assets with higher risks involving stocks, derivatives and other managed funds have remained exclusive to some top tier investors who have the means and the knowledge to access such markets. Over the past few decades, risk averse Indian investors have enjoyed the choice of picking assets such as fixed deposits, gold and even realty for assured gains.
Investments are about managing risks and maximising gains.
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