All of miceu's Comments + Replies

A No-Nonsense Guide to Early Retirement

I wonder if there is room for Bitcoin in this early retirement strategy. Or any high risk investment, like self picked stocks. What percentage could be safe to invest recklessly?

4gilch4moBitcoin is just a bit over 5% of my portfolio at the moment. I'm using the same dynamic volatility targeting I use for the stock and bond ETFs, but because of its sky-high volatility, that means I have to leverage down. [https://www.lesswrong.com/posts/fiPNjEGDbxy4mdhhT/how-to-lose-a-fair-game#You_Must_Know_When_to_Leverage_Down] BTC has historically been (mostly) uncorrelated with the stock market, which makes it a powerful portfolio diversifier. [https://www.lesswrong.com/posts/Wfed7zfm6ZyBXsrrp/the-holy-grail-of-portfolio-management] This means that your portfolio's overall volatility can actually be made lower by adding the extremely volatile Bitcoins to the mix, counterintuitive as that may seem, but only by adding them in sufficiently small amounts. Bitcoin is (by design) very deflationary, which can make it a good investment in the short term, but I fear the risk of total collapse in the long term can't be ignored. But at only about 5% of my portfolio, Bitcoin could drop to zero tomorrow, and I'd still be OK. In the meantime, I'll be pulling out money as the bubble inflates by keeping my volatility exposure to it balanced in my portfolio.
2deluks9174moCrypto started off like 5% of my portfolio. Now it is like 70%. I have actually been selling crypto lol.
1tryactions4moThis is mentioned in the "don't screw up" section. By market cap, crypto was 1.7% as big as the world stock market, and Bitcoin 1% as big, so those seem like good starting points -- adjust from there for your desired level of risk vs reward. IMO, self picked stocks are dumb. You give up diversification benefit for no reason, unless you think you know better than the market (which you don't).