I've started to think about how I want to plan to take some profits from a potential bull market. Up to now, I've been acquiring and HODling and, for a long time, had a buying plan in place to reach my various goals, including Orca status on Hive.
The majority of my Hive has been bought since the price dipped below $0.40 and much of it when Hive was $0.10. In the past week, Hive has hit the heady heights of 40 cents again and I was prompted to get a wiggle on.
Image by Karolina Grabowska from Pixabay If only my kitchen sink was in as good condition!
I remember that it took me some time to find a balance for buying Hive - it created lots of roller-coaster emotions. When to buy, how much to buy, will I lose it all and so on - especially as the price seemed to universally drop every time I made a buy.
Eventually, I learned how to manage those emotions as a small and new investor: I moved from spontaneous buys to setting a budget, buying regularly (in my case every Saturday), regardless of price, and rationalising my investments to myself through the dollar cost averaging (DCA) approach.
Selling has much the same emotions!
How much, when, will I miss out by selling too early, too late, will I miss the bull run by being too greedy etc etc etc. I've read lots of accounts of Hive HODLers who held through the last bull run and then saw their accounts gradually dwindle in the long slow sustained bear market of the past couple of years. Grim!
In the same way that I learned how to buy, I need to learn how to sell - competencies that will become commonplace life skills in the future as cryptocurrencies gain more traction. Starting to think about that, though, also started me thinking about managing my cryptoassets, as they are called by Her Majesty's Customs and Excise, as exactly that: assets.
Again, up till now, my crypto holdings have been part of a learning exercise about how blockchain technology works and understanding the potential of cryptocurrencies through living it. It's been an interesting experience, fun, a pastime. But now, even at these low prices, I find I have cryptoassets with a substantial value and a bit more than a pastime (although I understand that boats as a pastime can easily surpass the amount I have)!
So I've started planning three things:
1. Recovering my initial investment
I've invested several thousands in Hive, my first target will be about recovering that. Here's what I'm doing:
- set up a no-frills, no charges separate current account expressly for tracking cryptoassets transactions.
- set up an inventory and accounted for transactions to date.
- set a target and timescale to recover my fiat investment.
- set a Hive budget as the disposable assets to recover that stake.
- established a selling plan with selling thresholds and the quantity of Hive I will dispose of when the price of Hive reaches each of those thresholds.
- initiate a power-down to release stage one of the liquid Hive budget in the shortest possible time. I plan to start and stop power-downs on a regular basis to quickly release the amount of Hive I want available for disposal at any time.
- balancing liquidating Hive for disposal against maintaining Orca status.
2. Building my overall asset portfolio
My asset portfolio consists of two shares portfolios, property and cryptoassets. My next big investment will be in my property assets for two purposes - to improve my quality of life and to add value to the asset. I'm looking at a new kitchen sink: already the architect's fees are £750 and we haven't even chosen any taps.
Once stage 1 (recovering my stake) in place, I will be working on how to manage my total assets to release the funding to invest in the property. The architect has told the builder I want to be cooking my Christmas dinner in my new kitchen (yes, I'm getting a new oven as well as a sink).
Although I may have recovered my Hive Power by then, my thinking at the moment is that, at least some of, the funds will come through disposing of some of my Hive-Engine assets.
3. Transferring assets
This is a longer-term plan, but may come into play by the end of this year, depending on what happens with the market. I have always had a plan to transfer assets to other family members. Until now, the price has meant that the asset has not been sufficiently attractive to be valued by the recipients or worth the effort for them to learn how to manage it.
I think this may change over the next twelve months and I'm really looking forward to transferring wealth to a younger generation. Nearly all of them would benefit from a boost, whether it is helping with current economic challenges or enabling them to save for a longer-term future.
There is a fourth objective about retirement and quality of life - but I'll write about that in another post :)