If you think long-term and are not chasing quick profits, then you are unlikely to be interested in a 20-30-60% return.
Even 100% profitability is not interesting.
What is the point of such profitability if all the money can, for example, be blocked at the broker?
You can predict as much as you like, but still not understand the main thing.
Many newcomers who come to the market do not want to think about this at all.
They don't want to think long term...
As a rule, such guys move immediately with the queen, using the entire deposit for 1 trade and adding shoulders on top.
🤕 If you have already made some money and you have large capital, then the question arises of WHERE and WHAT to store it in?
❗️ Don’t forget about diversification so that in case of an error the damage is not fatal.
It seems to us that there are only 3 main types of risks:
1. Country risk
2. Broker risks
3. Currency risk
Let's look at an example of popular asset classes:
1️⃣ Cryptocurrency
Cryptocurrencies are an extremely young asset class and people over 40 are still very skeptical about them. Although for many young people, cryptocurrency has completely entered into everyday life, including my personal one. And in many countries this is the norm even among the population 40+.
We can identify 2 main problems with cryptocurrencies:
1. 99% of coins on the market have completely centralized controls. This means that all the risks described above automatically appear.
2. Complete dependence on Bitcoin of all other coins.
As a rule, in a medium-term downward trend, all alts fall, and with greater force than Bitcoin.
❗️ For example, just open the chart of any cryptocurrency and Bitcoin from November 2021 to November 2022 and compare the drawdown.
At the same time, there are essentially only 2 maximally protective assets with minimal risk on the planet: $BTC Bitcoin and $PAXG Gold.
But Bitcoin is still volatile, which means the price of security is a temporary drawdown.
2️⃣ Actions
When investing in shares, you need to look not only at the business, but also at the country where this business is located.
For example, let's take Yandex shares.
Not a business, but a dream! In terms of work and business model, many companies in the world need to follow Yandex.
But there is one caveat.
Yandex was unlucky with his habitat. And despite all his enormous talents and resources, stock prices are where they are now.
At the moment -58% of the maximum in rubles (not to mention the price in dollars), while American IT mammoths are updating highs in dollars...
❗️If you cannot predict the country's development strategy, then investing in any assets in this country makes no sense.
And the history of modern Russia since the 1990s. only confirms this.
Therefore, we are extremely skeptical about the Russian market in terms of investment.
Because we don’t understand the country’s long-term development strategy.
🌍 Why has all the world’s money flowed to the USA and Switzerland over the last ~100 years?
Investors' confidence in the stability of the economic and political future of these countries.
But our world is rapidly changing, and you and I have seen firsthand the fall of Switzerland, which held the status of a refuge for several centuries.
❗️Switzerland has blocked the assets of the Russian Federation and Syria over the past 2 years. We think this trend will continue.
Any shares are associated with political risk, but Bitcoin and Gold do not have this risk. Therefore, they can become defensive assets in the coming years.
3️⃣ Bonds
Nowadays, the trend of buying long-term and short-term US bonds is very popular. Historically, this logic is extremely clear.
Yes, if we analyze all past years, then US bonds can really show body growth of +20+30% in 2024. One could say that this is an ideal trade now if you ignore the country risk.
For Russians, buying US bonds may well end in blocking/freezing of assets. And we personally don’t know where to buy bonds with complete safety...
📊 Result:
Friends, if you keep all your money on one broker, in one country or in one asset, you are making a big mistake, for which you will have to pay dearly.
Remember the 3 types of risk and use diversification when using capital.
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