What is your time horizon?

Aug 08, 2022

Author: Elle Miller

One of the most important concepts in investing is understanding your time horizon.

Your time horizon is how long you can hold an investment before you need to liquidate it, either because you need the money or because of some other event that makes holding the investment no longer a viable option.

In the crypto space, it’s easy to be attracted by quick returns.

There are too many people promising coins to go to the moon or making you an overnight millionaire! 

The reality is, if you don’t have a long-term plan or set your expectations accordingly, you could end up losing money in the long run.

When investing in cryptocurrencies, it’s important to understand your time horizon and have realistic expectations about what kind of returns you can achieve in different periods. 

If all you want is to make quick profits, then perhaps it makes sense to invest only in short-term positions. But if you want to build a portfolio that will last for years (or even decades), then trying to achieve high returns with low volatility is crucial.

This is what will create generational wealth!

Just look at this example:

Say you want to buy 1 Coin for $3,600 and sell it for $6,500 in one year’s time. If you do this on a daily basis, then at best, you will earn $2 per day or $70 per month. 

On the other hand, if you do this on a monthly basis, then at best, you will earn $15 per month or $180 per year. 

This shows how important it is to have a long-term perspective when trading cryptocurrencies as well as any other assets like stocks and bonds or commodities such as gold and silver coins or even real estate property.

The reality is compound interest only really works OVER TIME!

And if anybody promises you short-term, quick gains? RUN AWAY. FAST. 

If you don’t, they most likely will. That’s what happens in rugpulls, scams, and other get-rich-quick schemes.

The important aspect of creating an investment plan is to understand where you are now, where you want to go and how long you have to get there. 

Many of our clients didn’t earn thousands a day overnight. We were able to 2x, 3x, or even 5x their portfolios over time and the right investments. 

So, realistically, what is your time horizon?