Summing Up The Week

With no significant news catalysts throughout the holiday-shortened week, the indexes did what they do historically – float up into year-end. A combination of factors causes this kind of seasonal price action: the big gains have more or less been locked in and traders are on holiday vacation which leads to low volume and not very much price action.

In lieu of market news to talk about, I felt this would be a good time to talk about 2024. More specifically, what my own investing resolutions are for 2024:

New Year’s Resolutions!

Resolution #1: Buying Bigger

Both 2022 and 2023 taught me that while my investing discipline is excellent at getting buying in stages during a selloff without fear, it turns out that I’m not buying enough. By the time a selloff has ended and the market’s bottomed, I have increased my positions across the board, but I still have too much cash on the sidelines. I either need to buy more often or buy more each time I do to reduce that cash hoard.

Resolution #2: Reduce the Cash Hoard

This one directly ties into my first resolution, but with a bit of a twist. As I write this, out of all my portfolios, I am only 63.69% invested. Now, while that is a supermajority, investment advisers recommend never carrying more than 10% of a portfolio in cash at any time.

I’m 36.31% cash. In fact, for the entirety of 2023, I always had more than 30% of my portfolios in cash. Now, while my performance has been stellar as I have beaten my benchmark – the S&P 500 index – by about 6% in my biggest portfolio, the Investments in Play, I can’t help but imagine how much greater those gains could be if I could put that cash hoard to work and get it down to 20%, at least, if not less than 10%.

Accordingly, 2024 will see me eyeing even more new positions to add to all of my portfolios. In addition to fulfilling the obligation of my first resolution of “Buying Bigger,” I also want to add some new positions so I can add more across a wide swath of sectors.

Resolution #3: Stop being a “Grumpy Gus”

While taking a Bearish narrative for the majority of time as a long-only investor has been a huge boon to my portfolio’s performance (I’m always prepared to add more during selloffs as I’m always looking for the next selloff), I find that I often allow this negative perspective to affect my attitude away from the markets.

… *cough* my loving wife tells me that I am far too negative, in general.

Accordingly, I’m going to make a strong effort to prevent any attitudes I have toward the markets to affect me when I’m not trading or investing. The irony is that I’m usually excited and giddy during market selloffs as I get to add to my favorite positions at discounted prices, it’s actually the bull runs that make me negative as I am frustrated when “stonks only go up.”

Accordingly, next year I will make an effort to stay positive rather than look toward the negative elements.

So, how about you?

What are your favorite investing (or other kinds of) resolutions for the new year? If you’re so inclined, feel free to leave them in the comments.

Next Week’s Gameplan

Despite next week being the start of a new year with the majority of players returning from vacation and a chock-full news calendar, it will remain a four-day holiday-shortened week thanks to the New Year’s Holiday.

Additionally, with everyone finishing off 2023 with huge profits, it’s likely we’ll see a spat of significant profit-taking throughout January, potentially starting as early as next week as investors and traders lock in gains while avoiding the tax events they would have made had they sold in the last week of 2023.

In other words, next week could be very, very interesting.

In the meantime, I wish you and yours a very Happy New Year celebration, and I’ll see you all back here next Friday, friends! 

This Week in Play

Stay tuned for this week’s episodes of my two portfolios Investments in Play and Speculation in Play coming online later this weekend!

Crytpo Corner

Bitcoin Price Action

Bullish Consolidation Reigns Over Bitcoin

Bitcoin spent the last week consolidating, and while it did pull back nearly -6.50% from the weekly high, the crypto found a higher weekly low at $41,600.67 on Tuesday. If Bitcoin can reverse and rally through its weekly high at $4,424.36, the bullish pattern will remain intact and some interesting moves could take place once we enter into a new monthly candle.

The Bullish Case

With the Bitcoin spot ETF approvals just on the horizon with Bulls believing the SEC will approve all 7-9 of the ETFs by mid-January, the expectation is for significantly more bullish price action both before and even after the announcement. The idea is that the institutions will need to buy more Bitcoin to support their then-approved ETFs and that the general public will FOMO into the market as a result of the positive news catalyst.

The Bearish Case

Many Bears believe that the price action for the approval of spot ETFs has already been discounted into the price of Bitcoin. Some Bears also point out that Bitcoin is currently in its longest period of time without a pullback of at least 25% since 2014. Of course, there are no guarantees that timing patterns is a reliable indicator, it’s certainly one for Bulls to keep in mind as a 25% pullback from Bitcoin’s high at $45K gives us a low-end price target around $34K… buying opportunity!

Bitcoin Trade Update

Current Allocation: 2.100% (+0.100% since Last Update)
Current Per-Coin Price: $43,537.15 (-0.01% since Last Update)
Current Profit/Loss Status: -1.80% (-1.89% since Last Update)

Bitcoin’s volatility has provided significant buying and selling opportunities for me throughout the week. Net-net, I ended up adding to my position with an average buy price of $42,686.40 (after fees) and I increased my allocation +0.1% from 2.00% to 2.10%. The orders lowered my per-coin cost -0.01% from $43,570.58 to $43,537.15.

Naturally, I will continue to make moves with whatever the Bitcoin market gives me. If we see a selloff, I’ll add at key price points, but if Bitcoin rallies above my cost basis once again, I will continue to take profits and trim.

Bitcoin Buying Targets

Using Moving Averages and supporting trend-lines as guides, here is my plan for my next ten (10) buying quantities and prices:

0.027% @ $41,717
0.027% @ $41,435
0.027% @ $40,758
0.027% @ $40,558
0.027% @ $40,206
0.027% @ $39,468
0.027% @ $38,564
0.027% @ $37,612
0.027% @ $36,743
0.027% @ $35,852

Not Your Keys, Not Your Crypto…

In light of brokerage failures in 2022, I no longer keep any of my crypto on an exchange and I only keep enough USD on the exchanges I use to execute my next few buys. I use multiple cold wallets from the brands Ledger and Trezor to hold my crypto (click the links to access the direct sites, and I receive no affiliate benefits from these links).

Additionally, I have now divided my allocated USD between two different exchanges – Gemini and Coinbase – in case one (or both) becomes insolvent. Disclaimer: We both receive a bonus if you use either my Gemini or Coinbase referral links to open accounts.

I do not trust anyone in the space, even with Coinbase (COIN) being publicly traded (and one of my own Investments in Play positions).

No price target is unrealistic in the cryptocurrency space – Bullish or Bearish.

While traditional stock market investors and traders may think the price targets in the cryptocurrency space are outlandish due to the incredible spread (possible moves include drops of -90% or more and gains of +1000% or more), Bitcoin has demonstrated that, more than any speculative asset, its price is capable of doing anything.

Here are some of Bitcoin’s price movements over the past couple of years:

• In 2017, Bitcoin rose +2,707% from its January low of $734.64 to make an all-time high of $19,891.99 in December.
• Then, Bitcoin crashed nearly -85% from its high to a December 2018 low of $3128.89.
• In the first half of 2019, Bitcoin rallied +343% to $13,868.44.
• In December, Bitcoin crashed -54% to a low of $6430.00 in December 2019.
• In February 2020, Bitcoin rallied +64% to $10,522.51.
• In March , Bitcoin crashed nearly -63% to a low of $3858.00, mostly in 24 hours.
• Then, Bitcoin rallied +988% to a new all-time high of $41,986.37 in January 2021.
• Later in January 2021, Bitcoin dropped -32% to a low of $28,732.00.
• In February, Bitcoin rallied +103% to a new all-time high of $58,367.00.
• Later in February, Bitcoin dropped -26% to a low of $43,016.00.
• In April , Bitcoin rallied +51% to a new all-time high of $64,896.75.
• In June , Bitcoin crashed -56% to a low of $28,800.00.
• In November, Bitcoin rallied +140% to a new all-time high of $69,000.00.
• In November 2022, Bitcoin crashed -78% to a low of $15,460.00.
• In April 2023, Bitcoin rallied +101% to a high of $31,050.00.
• In June, Bitcoin dropped -20% to a low of $24,750.00
• In July, Bitcoin rallied +29% to a high of $31,862.21.
• In September, Bitcoin dropped -22% to a low of $24,900.00.
• In December, Bitcoin rallied +81% to a high of $45,000.00.

Where will Bitcoin go from here? Truly, anything is possible…

What if Bitcoin’s headed to zero?

The only reason I speculate in the cryptocurrency space is I truly believe Bitcoin isn’t headed to zero.

I am prepared for that possibility, however, by knowing I could potentially lose all of the capital I’ve allocated to this speculative investment. Professional advisers recommend speculating with no more than 5% of an investor’s overall assets. Personally, I’ve allocated less than that to speculating in crypto.

I feel that anyone who doesn’t fully believe in the long-term viability of cryptocurrency would be better served not speculating in the space.

On a good day, this asset class isn’t suitable for those with weak stomachs. On volatile days, the sector can induce nausea in the most iron-willed speculator. If a speculator isn’t confident in the space, the moves will cause mistakes to be made.

DISCLAIMER: Anyone considering speculating in the crypto sector should only do so with funds they are prepared to lose completely. All interested individuals should consult a professional financial adviser to see if speculation is right for them. No Get Irked contributor is a financial professional of any kind.