Investment Survey - Diversification within or between Investment Sectors?

in hive-167922 •  5 months ago 

Just yesterday I received an email from my cousin, asking about investing. She sent it around to the whole family, and I hope she let's me take a look at the results when they all come in. Here was what she sent:

investmentSurvey.png

What advice would you give a 17 year old who is trying to invest? ( Places to invest, places not to invest, types of investment, how much money to put in)

This made me happy, and seemed pretty intelligent. I answered her as follows:


I would ask the 17 year old what are her goals? The first thing to understand about investing is that it is not one thing, it is the application of a strategy; choosing investments will be based on priorities established in the goal.

All investments are basically a trade-off between risk vs. security, liquid vs. illiquid, high vs. low returns vs time. Within those multiple spectrums we can classify any investment. A risky investment with low return? No one ever recommends those. A super safe investment with a quick high return? People call these 'too good to be true (ie SCAMS!). Municipal bonds pay really low returns but its unlikely that municipalities default. Loaning your best friend money to start their own business has a ton of risk, but might yield you a major benefit if successful.

What are you trying to do? If you are saving for college you might be too late for 'investing'. If you are saving for retirement we have many decades to work with, so the discipline becomes more important. Are you saving for an opportunity? If so liquidity becomes important. Land can be a great investment (I bought some), but it is not liquid, its time consuming to sell. You can borrow against it though....

Infinite options exist within the word investing. My advice:
(1)Define your goals
(2)Infer characteristics of ideal investments
(3)Come up with a list of options
(4)Run cost-benefit analysis of each option on the list
(5)Diversify

My personal strategy is to avoid stocks and bonds right now. Hold cash and precious metals (maybe some crypto) because the economy is due for a nice crash. Once it crashes, things are cheap and you can use your cash and silver to buy stocks and land. Also, start a business.

As more questions, get more answers - Good luck and God Bless :)


As I logged into STEEMLEO, I noticed that the talk of the week was about

'What is my most Heavily Weighted Investment Sector and Why?'

My current portfolio is heavily weighted towards Land and Crypto. This is mostly an artifact of me not having a very big portfolio, but having some land and some crypto.

These two investments are at the opposite ends of the spectrum. While my crypto-portfolio's value can be calculated and changes tracked hourly, its very hard to determine the appreciation value of the land, if any, until I sell it. In the event of something catastrophic that I do survive, the land will continue to feed me and my family while the crypto might not exist.

My crypto portfolio, on the other hand, is extremely diversified across several blockchains. The asymmetric risk, networking opportunities and potential to learn and apply programming to daily tasks has kept me satisfied with crypto in general and #STEEM in particular throughout this bear period.

I sold all of my silver during the last pump (2012), and all of my stocks during their last pump (2007). As the future unfolds, I would be very interested in leveraging an entrance back into carefully selected stocks when they become undervalued once again. Part of me really wants to get back into precious metal but I have no where trustworthy to put it, ironically cryptocurrency seems safer than gold to me, as local thief is much more common than global grid collapse.

Join in the #leowritingcontest to share your strategies!


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I love the advise you have presented which are basically guidelines than "Do XYZ". My answer to your survey is that it doesn't matter. What I care about is being uncorrelated. That is the true measurement of diversification. I personally have a 100% crypto portfolio (pretty much emptied my bank accounts few years ago) My #1 criteria for investment is asymmetric risk. After I filter out the best possible investments, I go for few uncorrelated investments. @steemmonsters turned out to be my best investment for 2019 in terms of ROI. Just because the cryptocurrency sector is facing a bear market, you shouldn't think that you can't have some great ROI there.

To me this is why uncorrelated investments matter. Diversification is simply a side effect of that. But I wouldn't recommend my strategies for random people. I seem to have a seriously high risk tolerance and nerves of steel to stay chill in a bloodbath. Maybe you should recommend her https://www.youtube.com/channel/UCV6KDgJskWaEckne5aPA0aQ

Douglas Kruger is another great place to look at:

Thank you for this additional material to share with her, I will surely do that!

I find you and your strategies very interesting, would it be possible to conduct an interview with you? I prefer slow, text based interviews over something like discord to allow digestion of the material and links that come up in the conversation. You may know that I run a fund and am looking to understand the best ideas in that context.

Asymmetric Risk is something I am very familiar with, and recently I have begun to discover the possibilities of multi-leveraging (usd - btc - steem - appreciating steem-backed token) - and how to move back and forth on currency spectrums. But I believe the next round of value generated will be actual profitable businesses using the power of blockchain, not new blockchain-only-businesses. If a business model is already profitable, then #STEEM can easily become a competitive advantage. But navigating these waters is something that not everyone has the skills to do - and that goes for so many different types of promising cryptos! (Komodo comes to mind, I still am not sure about my tokens after filling out the survey).

In the near future I look forward to setting up teams to build on as well as guide people through building on #STEEM, as well as building a lot of cool low hanging fruit that I see if no one beats me to it haha.

I'm really honored! I have never been asked to do an interview. I have been interested in your fund. I had to spend on buying a planet for @nextcolony I will have some STEEM to buy in later this week.

would it be possible to conduct an interview with you? I prefer slow, text based interviews over something like discord to allow digestion of the material and links that come up in the conversation.

Sure thing. I have zero experience in something like this. But send your questions to "Makishima Shougo#9918" on Discord and I'll be happy to answer.

multi-leveraging (usd - btc - steem - appreciating steem-backed token) - and how to move back and forth on currency spectrums.

This is the single most underrated investment strategy ever IMO. This and asymmetric risk is the very core of my investment strategy/philosophy. It is the reason I'm not even invested in (or only having a small stake in) some of my favorite cryptocurrency projects like Dash, Komodo and the biggest of them all Hashgraph.

On advantage established business have is that they actually know business. Most crypto projects are made by coders. Most of them don't know much about business. I see tremendous potential in blockchain only business that provide the tools instead of products. They will be the Oracle Corporation or AWS equivalent or simply the guys who sell shovels amidst the old rush. That's why I love STEEM so much. Despite seemingly endless flaws one after the other, STEEM checks so many boxes really well.

Best of Luck with your projects! I see a great deal of first mover advantage opportunity on STEEM.

I see tremendous potential in blockchain only business that provide the tools instead of products

I have sent you a friend request on discord!

These days, there is also perhaps more interest in non measurable things... Such as the ethical and sustainable ideals of an asset or company. These things are possibly good things to think about as well... After all, the crazy race for ROI at the cost of all other things has not led us to a good place. Perhaps a smaller profit over time, but one that you are able to sleep with is also something that is interesting?

Fantastic point, and totally unexplored in my article and answer! I love to invest in sustainable development projects, but do morals cheapen by becoming another part of diversification?

'I have 30% ethicality in my portfolio'

Thank you @ecoinstant for considering CO2Fund as one of your investment sectors 😉 and for your really generous enrollment of @co2fund in Steem Basic Income. @retinox

Keep up the great and serious work with CO2Fund! I hope to submit this project as a carbon project very soon under @quintaesencia. Do you think it will qualify?

  ·  5 months ago (edited)

Thank you @ecoinstant. I'll do my best to do everything right, serious and transparent.
Of course you can submit your project - the right place to do it is here. I would be happy to see your project in the list. So don't miss to submit it. And of course you can nominate more than one project.
Maybe you should leave a note why it is not 'just' an agricultural project but a CO2-project too (besides that trees and plants of course have a positive impact on CO2 reduction - but maybe this is already the big point).
At the end our steem community will decide which projects will be supported with COCOs. I like to see that decision as a democratic process. We will see how to handle that.
Thank you for your support @retinox

Thank you @retinox, for using the CO2 Compensation Coin (COCO) to reduce your CO2 footprint.

Thank you @ecoinstant, for using the CO2 Compensation Coin (COCO) to reduce your CO2 footprint.

Always good when you can share positive energy and content with young minds. Lord knows there's plenty of negative in the world. And if the positive happens to be the Blockchain? Even better!!

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You got some love from a member of @thealliance family!
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I don't know anything about investments, but I'm sure you'll find the formula to move forward and render those accounts @ecoinstant

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Dear @ecoinstant

Finally I'm having some time to relax and read few publications I bookmarked earlier on. Past few days have been quite insanely busy.

It amaze me that your cousing is already thinking about investing and finances in that early age. Respect to her.

Your response has been very mature. It's crutial to ensure that she will learn about her own goals, develop patience and will understand, that investing require knowledge and experience - and this comes usually in very painful way - by initially losing funds we invested.

Grat read buddy, Upvoted already.
Yours, Piotr

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hi @ecoinstant
I just read that your post won in steemleo contest. Great job buddy :)