Are you interested in cryptocurrencies?
An important rule of thumb for investors is to invest 5% or less of your net worth in crypto.
Here are 3 reasons why:
- Crypto is highly speculative. We have no idea which coins will be more popular than other coins over the short and long term. Yes, you can try to trade coins based on volume but remember, we’re investors, not traders. Traders lose money 99.9% of the time.
- Crypto is not a business. In other words, digital coins do not have financial statements including the Income Statement, Cash Flow Statement, and Balance Sheet. This means, we can’t calculate where coins are going. On the other hand, stocks are businesses and Tykr looks at the financial statements to determine if the stocks are On Sale, Watch, or Overpriced.
- Influencers are paid to promote garbage. There are a lot of risky coins in the market that pay finfluencers (Financial influencers with very little investing or business experience) to promote their products. We saw this with FTX. This can trigger FOMO and cause investors to get involved with bad investments. I highly recommend you ignore these people. If you do listen to or watch their content, I recommend you take their opinions with a grain of salt.
If Tykr doesn’t analyze crypto, you might wonder why crypto has been added to the Tykr platform?
There are 3 reasons why:
- Alerts – Tykr customers may set price alerts on Stocks, ETFs, and Crypto in one clean location.
- Convenience – Tykr allows customers to view crypto prices and market caps in one clean location.
- Ecosystem – Tykr wants to invite crypto investors into the Tykr ecosystem so we can introduce them to value investing. By this point in your training, you may know that value investing in stocks is much safer than investing in crypto.
If you do invest in crypto, as mentioned above, try to invest 5% or less of your net worth and try to gravitate to larger “blue-chip” coins which have significant shares held by both institutional and retail investors. Blue-chip coins are still risky but much less risky than small-cap coins no one has heard of.
If you invest in crypto, proceed with caution and as mentioned in Hunger Games, “May the odds be ever in your favor.”