First, there are several things you should already know about investing but chances are no one ever set you down and explained them to you. In this article, I will teach you the basics and the most advanced knowledge when it comes to investing and building a strong portfolio. When it all said and done, you are going to be able to pass on some wisdom to your kids and kids' kids.
Risk Tolerance: Scaling Your Risk Tolerance
The Conservative Portfolio: Why Choose A Conservative Portfolio
Investing In ICOs: Airdrop Me Some Wisdom, Please!
Good To Have.. Hard To Do
You basically have one or more factors to contend with when scaling your risk tolerance and you should always ask yourself an important question, "How Soon Do I Expect To Need The Money I'm Investing"? Stocks have been known to fall hard and fast in a short 24hr period compared to a week or even a month, so it wouldn't be wise to invest a mortgage payment but if you are then you will want to make sure the Liquidity/USD ratio returns in your favor, otherwise you are setting yourself up for failure. Another factor is "Can You Ride Out A Bear Market"? This is a very common miscalculation if not the #1 itself. So many have seen a stock rising as though it is about to take off and assume they are going to miss out. Then the bear market hits and it turns out to be a long one. While your sitting home alone in the dark writing IOUs and waiting to at least break even, hours are turning into days and days into weeks and weeks into months. What you will soon realize is there should have been a backup plan. A good backup plan looks like a steady, highly dependable rate of income even it's merely $5/week it should not be underestimated and taken for granted because the most prominent and wealthy started out with a buck and change and I know people who've used their last buck to buy a lottery ticket and now have thousands.
The Conservative Portfolio
Playing Many Positions
Picking up where I left off in Risk Tolerance, your portfolio should be able to outweigh and balance your risk to outperforming any (24hr, 7d, 30d) adjustments in the market. There will be many and they will happen very often but here's what you need to know.
Bitcoin Is A Stable Investment
- Bitcoin dictates the market because Bitcoin pairs are most the popular and reliable. In any market you cannot purchase alt-coins without Bitcoin which has an even bigger advantage because Bitcoin can be brought and sold in USD without any barriers. Additionally alt-coins volatility will always be linked back to Bitcoins' market performance.
Ethereum Is A Reliable Investment
- ERC-20 tokens and smart contracts introduced the world to Ethereum. There are currently over 2000 alt-coins (ERC-20 Tokens) powered by the Ethereum Network. Basically if the Ethereum Network shuts down, more than 2000 ERC-20 tokens and smart contracts (Trading, Withdrawing, Sending, Depositing) will essentially become worthless immediately.
Litecoin Is A Smart Investment
- Litecoin dubbed the Beta Testing grounds for Bitcoin upgrades (i.e. SegWit Technology), built on a solid peer-to-peer ecosystem, reliable track record and can be purchased for under $100. An overall great value, low-risk and positive ROT on your investment.
The best conservative portfolio will involve only these three assets because you know when combined lead and dictate a $50 billion dollar market.
Investing In ICOs
Airdrop Me Some Wisdom, Please!
So now you have your new portfolio freshly minted and valued properly so what's next.. getting involved with ICOs to diversify your portfolio without spending a dime more but here's what you need to know about ICOs and hard forks according to the new IRS Tax Law Rulings.
IRS Revenue Ruling 2019-24 - Hard Forks
If the taxpayer did not receive new units of cryptocurrency after a hard fork, then no, they do not have gross income.
IRS Revenue Ruling 2019-24 - Airdrops
If a taxpayer had cryptocurrencies that went through a hard fork followed by an airdrop, and they received new units of a cryptocurrency, then there is a gross income, and that is taxable.
You will want to make sure you keep your conservative portfolio separate by any means from the airdrops and hard forks resulting from ICOs, IEOs and Hard Forks. In the long-run which is about every 12 months when it is time calculate your tax bill because those free alt-coins can come back to haunt your finances.