5 things you should know about Bitcoin

By Jason Stutman Written Sunday, December 4, 2016

Referred to by some as “digital gold,” Bitcoin is one of the most controversial investment opportunities that exists today. Over the past five years, the value of Bitcoin has skyrocketed nearly 25,000%, meaning if you had the foresight to buy and hold early, you could have earned as much as 250 times your initial investment. That's enough to take $10,000 and turn you into a multimillionaire... But many investors are still keeping far away from Bitcoin, despite its historic rise. To the average person, it’s all just too unfamiliar, too intimidating, and too risky. Yet after years of naysayers predicting that the sky will come crashing down, Bitcoin just keeps on chugging along. Hard to believe, but the cryptocurrency has been around for almost a decade now, and at this point, it doesn’t seem to be going away. In fact, Bitcoin's bid as a serious investment has only matured in recent years as the digital currency has come of age. Once rightfully considered a virtual lottery ticket, Bitcoin has gradually cemented itself as a legitimate asset to consider for your portfolio. This week, the cryptocurrency marked its longest stretch trading over $500 since its inception nearly a decade ago. For six months, Bitcoin has climbed well past that mark, now trading near $750. If that makes you feel like you've been missing out, but you aren't convinced just yet that Bitcoin is right for you, here are five things you should probably know about this unique investment... #1: More and More People are Using Bitcoin Every Day In its early days, Bitcoin was little more than a speculative bet for day traders hoping to turn a quick profit... That’s because as a currency, Bitcoin had very little utility aside from on the black market. Like trying to pay your rent in yen, buying goods with Bitcoin was just something you didn’t do. But after years of gradual adoption, more and more people are using Bitcoin for real-world transactions every day. In January 2010, Bitcoin was averaging less than 200 transactions a day. Today, the digital currency is used in as many as 300,000 transactions per day. (Source: blockchain.info) In other words, Bitcoin is no longer just a form of money in theory; it has become a form of money in practice. People are buying goods with it, just as they do with any other form of currency. For long-term investors, this is great news, because after all, that’s where Bitcoin’s value exists. So long as adoption of Bitcoin as a currency continues to increase, its value should move in tandem. #2: More Vendors are Accepting Bitcoin There are two main reasons Bitcoin transactions have and will likely continue to increase. The first is a growing acceptance from legitimate vendors. Since 2013 there have already been a number of major retailers that have taken the initiative to treat Bitcoin as a legitimate method of payment. Notable companies include Expedia, which now accepts Bitcoin for all hotel bookings, Overstock.com, which began accepting Bitcoin for its products in January 2014, and Microsoft, which recently added Bitcoin as a payment option for its digital content. Other major vendors include Dell, Subway, Newegg, TigerDirect, Tesla, PayPal, and REEDs Jewelers, to name just a few. Even the Sacramento Kings NBA franchise now accepts Bitcoin online and at the Golden 1 Center arena. That means NBA fans can get tickets, jerseys, hot dogs, and, yes, even beer with their bitcoins. #3: Volatility is Trending Down On top of an increasing number of vendors accepting Bitcoin, price volatility is trending downward — and for long-term investors, that’s a good thing. In 2011, the 30-day volatility of Bitcoin was nearly 16%, but today it’s closer to 2.0% on a dollar basis. (Source: btcvol.info) This simply means the day-to-day fluctuations in the price of Bitcoin are decreasing and the value of Bitcoin is becoming more stable. And for a form of currency, this is incredibly important, because it means consumers’ money is more reliable. If a loaf of bread cost $4 yesterday, $2 today, and $7 tomorrow, chances are you wouldn’t have much faith in the dollar. The same rule applies to Bitcoin: the less volatile it is, the better it will fair in the market. Of course, Bitcoin will continue to have bouts of volatility, and it is still years away from being completely stable, but as of today, its price stability is on par with the Mexican peso and South African rand. For a 10-year-old currency, that’s not too shabby. #4: Bitcoin Has Been a Hedge Against Economic Uncertainty For decades, if not centuries, gold has been the go-to safe haven in times of economic uncertainty. When stocks go down, people buy gold. When economies collapse, people buy gold. But investors have increasingly turned elsewhere in recent years in the face of economic turmoil. When Cyprus’s economy tanked in 2013, Bitcoin soared. When China’s yuan collapsed in 2015, it happened again. And when Brexit sent tremors through the market in 2016, Bitcoin investors had a field day, as the currency’s value exploded as much as $100 in a day. In the month leading up to Brexit, fears sent prices from $400 to over $750. Bitcoin tends to work as a hedge because it's disconnected from the traditional financial system. It offers an easy way for people to exit economies that revolve around government money and bad monetary policy. If you’re one of the many people worried that the U.S. dollar is on its last legs as the global reserve currency, Bitcoin isn’t a bad bet. #5: Buying and Selling is Easier Than You Think Contrary to popular belief, you don’t have to be a computer scientist to invest in Bitcoin. Buying and selling the cryptocurrency is actually pretty simple: all you really need is a credit card, bank account, or PayPal to get started. There are a number of easy-to-use platforms for trading and storing bitcoins. Some of the most reputable ones include Coinbase, Kraken, BitQuick, and Blockchain Wallet. Buying and selling Bitcoin today is about as easy as trading stocks. Once you’re comfortable with whatever platform you choose, you can get started right away. But remember, Bitcoin still carries plenty of risk and should only account for a small portion of your portfolio. The best investors are well diversified, and Bitcoin is just one place to potentially grow your wealth. Until next time, Jason Stutman

GOLD

Dear Reader, When it comes to saving a portion of your earnings, an error most people make is to save their wealth in man-made currencies. These currencies are controlled by central planners, are regularly manipulated, and are created out of thin air without regard for the value of the currency you have in your wallet. In the digital age, accounts holding these currencies can be frozen, easily confiscated, and tracked. I personally advocate saving in gold or other precious metals, like silver, palladium, or platinum. A combination of truths lead me to this simple savings strategy: 1. They’re lawsuit-proof. Not technically, but the fact is no one knows how much gold you have – it is a private matter. Gold is "off the books" when it comes to financial accounting. 2. It has a history of being money, an independent unit of account that is the same no matter where it was mined or how old it is. It is a constant measurement of value; you can take a gold piece anywhere in the world and it will still have value. This is much different than a fiat currency. Once outside of your nation's borders, a currency may not be generally accepted. You also have thousands of fiat currencies that no longer have any value, like the U.S. Continental or the Confederate States of America dollar. 3. It can't go to zero. Zero value for gold isn't an option. It hasn't ever happened, and never will. The process to get a one-ounce gold coin to you has hundreds of man hours behind it, and maybe even thousands, if you consider the full operation of gold exploration, production, refinement, and delivery. This is the entire point of saving your wealth: you save to not lose. I understand that you can measure gold vs. the dollar or gold vs. oil, and that its price will fluctuate, but the value in gold itself does not change. 4. The currency printers are hoarding it. When the most powerful group of people in the world, the central bankers, desire to have one asset, then that alone should get your attention. Central banks print the currencies that the masses treat as a store of value, and those central banks buy and store physical gold – not silver, not houses, not oil, they own gold! If it is good enough for the masters of this world, then it's good enough for me. 5. It’s financial insurance. When it all hits the fan... Be it from a government or economic collapse, at the end of the day, gold survives. It still has value in the new world. It also makes for a great "start over fund" for the reasons listed above. It won't go to zero, and it's private money. 6. It’s portable. I think it's important that if you need to, you could easily carry or move your wealth to a different region. Just to give you an idea, $250,000 in gold is about the size of a VHS tape. Your fiat currencies are typically tied up over the weekend and on bank holidays; in fact, even if you wanted to physically get your cash, you couldn't unless you gave your bank a 72-hour notice for withdrawals of over $5,000. 7. It’s legacy wealth. Gold is something you can safely store away, knowing that it is something of great value that you can pass on to your children and your children's children. It is a safe stash of value that you can tap into when you are in your "golden" years, or at any time throughout your life. Ultimately, when you are saving a portion of your earnings, you want to protect and preserve it. Gold, in my opinion, along with the other precious metals, are the best way to achieve the objective of saving money by preserving both the value of your savings and protecting it from unwanted dangers, like government and civil litigation. Daniel Ameduri President, FutureMoneyTrends.com

Elevate Your Trading: 5 Tips on Trading Losses

by Gary Dayton

“I avoid trading losses at all costs; I hate losses!" "Trading losses are just awful!  I can’t stand them." "When I have a trading loss, it just shows I'm not a good trader, husband, father, provider, … or person!"How many of us have such thoughts about trading losses? Most, I would imagine, though we never talk about them. We may not even acknowledge them, but they are important. Such thoughts cause us to cut winners short, hold onto losing trades, avoid pulling the trigger, and even over trade by entering a marginal position or doubling down with position size to make up for that last loss.

Impact of Our Thoughts on Losses

How we think about losses is important. Our thoughts about losses directly influence our trading behavior. They can affect how we see ourselves as traders and our self-esteem. Thinking about losses in an unconstructive manner can create a negative trading spiral and actually compound our losses.  Thinking losses are just dreadful, we actively try to avoid them in unsound ways.  We commit defensive trading behaviors like cutting winners short, letting losers run, etc. These erratic trading actions may cause even greater losses, further reinforcing the notion that losses are bad. Self-esteem and confidence wither, setting us up for more of the same on the next trade.

The reality is trading losses will happen continuously throughout your trading career. They are inevitable and unavoidable. With practice and experience, losses happen less frequently, but you cannot eliminate them completely.

Reasons for Losses

Losses occur for two primary reasons: 1) we make mistakes and 2) the market context changes.

We are human and trading is complex. Trading is very demanding on our mental and emotional capacities; it is hard not to make mistakes. Also, the market constantly changes. A trade setup that worked yesterday may not work today because the market context is now different. Trading is based on probabilities, meaning that there is always a certain likelihood of loss in any trade setup.

If we think unconstructively about losses, we are sure to struggle with our trading.  Here are five tips that can help you re-set your thinking and attitude about losses:

5 Tips on Trading Losses

1. Accept Losses. Instead of viewing them as awful, recognize that they are a natural part of the game. No one wins 100% of the time. Every professional trader had losses. Give yourself permission to have losses and accept the probabilistic truth of trading.

1. Commit to Trading Well. Even when you might be thinking negative thoughts about a potential loss, be steadfast in following your trading plan. Manage your trade by what you see in the price movement and indicators, not by what your mind is saying to you.

1. Use losses to learn. This is what the best traders do.  Learn about yourself as a trader and about the market through your losses. Are you doing things that you can improve on when you have a loss? Did the market context change and show you that the trade was unlikely to work? Use this information with future trades.

1. Trade with an Edge. Make sure all your trade setups have a probability of working and an expectancy of producing profit. Write them down in your trading plan and work only your plan. This is the only way you will generate profit consistent with your edge.

1. Study market context. Any trade setup will work better in some market conditions than others. Know the context in which your setup works best and the context in which it doesn’t work as well. This will improve your edge and reduce the frequency of losing trades.

Reviewing your trades is an excellent way to learn from losses and better understand market context

10 Characteristics Of Successful Entrepreneurs

Do you have the qualities of a successful entrepreneur? Those who do tend to share these 10 traits.

1. Successful entrepreneurs have passion and motivation. They’ve found something they can work on over and over again without growing bored -- a job they want to do for the rest of their life.
2. They will risk time and money, but they preserve resources for dealing with “unknown unknowns.”
3. They are confident and enjoy what they do. Sometimes they come across as stubborn, but that demonstrates their discipline and dedication.
4.  Entrepreneurs are adaptable and flexible. They welcome any suggestion that can optimize their offerings and satisfy their customers.
5.  Entrepreneurs understand their offering and the market. They keep up with the competition and consider external factors that can lead to failure.
6.  Entrepreneurs manage their money. Profitability takes time, and until then capital is limited and must be used wisely. Successful entrepreneurs keep a complete handle on cash flows, the lifeblood of any business.
7. Entrepreneurs plan appropriately. They plan as much as possible, but keep some dry powder in reserve, and handle the unexpected with the right mindset.
8. They have networking abilities. They reach out to mentors to seek valuable advice.
9. They are prepared to take the exit. Failure is not unusual, and sometimes it’s best to follow a practical route into a new venture instead of sinking resources into a lost cause.
10. And lastly, entrepreneurs doubt themselves, but not too much. Ask yourself, can I do this? Do I want to do this? Instead of worrying about fitting in with someone else’s image, check your gut. That should tell you a lot.

Read more: 10 Characteristics Of Successful Entrepreneurs - Video | Investopedia http://www.investopedia.com/video/play/10-characteristics-successful-entrepreneurs/#ixzz3zivvc9bi 
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