Following my dad's hands-off investing advice helped me grow my bitcoin portfolio substantially, even in a wild market
- I tried to time the market when I first started investing, and I lost every time.
- My dad advised me to invest and then look at my portfolio rarely to resist the temptation to sell.
- I followed his advice with my bitcoin portfolio, and it’s quintupled in value over time.
I have been interested in building wealth ever since I could remember. I mainly attribute that to my mom, as she never gave me money growing up for discretionary purchases. By the age of 10, I had already started my first hustle, selling waters and sodas in my local park during the summer. When I was 13, I started a dog-walking business, and by the time I was a senior in high school, I had clients all over my neighborhood.
By the time I got to college, I had a decent amount of money saved that just sat around in my bank account. At the end of my sophomore year, my dad encouraged me to start investing some of my saved money. Seeing as I knew little about investing, I thought it would be best to create two portfolios.
One was a virtual portfolio that I called The Stock Of The Month, and the other was my personal portfolio with Ally Bank. For The Stock Of The Month, I would identify a basket of stocks every month with high growth potential and choose one to add to this virtual portfolio. I would then provide insights and reasonings behind each pick on LinkedIn and compare my portfolio’s performance to the S&P at the end of the year.
For my personal portfolio, I tried a much different approach. I had heard so many stories about people getting rich quickly by swing trading. So, I tried to do the same and would enter and exit trades weekly. I bet you can imagine how that turned out.
The investing advice that changed my life
My personal portfolio had lost value in my junior and senior years, never once beating the S&P 500. However, my virtual portfolio beat the market every year.
Upon graduating college, I shared that bit of information with my dad. I explained to him how strange it was that the portfolio I was constantly managing found a way to lose money every year. Yet, the portfolio that I only added to once a month and barely paid attention to kept beating the market. He didn’t seem shocked at all.
He went on to show me his portfolio and showed me the stocks in which he made the majority of his money. To my surprise, it was the stocks that he invested in and rarely looked at that appreciated the most in value.
He said that he also succumbed to the same mistakes I was making when he first started trading. He kept trying to time the market, jumping in and out of stocks, and found himself losing much more money than he was making. He then went on to tell me, “If you want to make real money in the market, look at your portfolio as seldom as possible.”
Getting into bitcoin
Around August of 2019, bitcoin had just had a considerable run-up from $3,500 to around $10,000. I knew I wanted to get into bitcoin and thought that there was no time like the present.
So I invested in bitcoin the following month and did something that I’ve never done before. I turned off all notifications from my brokerage account and didn’t look at my account for the rest of 2019.
At first, I was super anxious to see what was going on in my portfolio. However, after a month, I practically forgot that I owned bitcoin. In early 2020, a friend and I were discussing our crypto holdings, and I decided to look at my account.
I realized that I totally missed that bitcoin fell to as low as $7,000 in December 2019. I know for a fact that if I were constantly monitoring my account, I would have panicked, sold my bitcoin holdings, and started looking for other investments. If I had done that, I would have missed out on the huge bull run bitcoin had for almost all of 2020. Since I started investing in bitcoin using my dad’s advice, my portfolio has quintupled in value.
I’m sure all of us have a story where we bought a stock and sold it for a marginal gain (if not a loss) where if we’d just bought it and held it, we would have been up 10 times what we sold it for.
Even now, after I have read over a dozen financial planning and investing books, I still refer back to my dad’s advice: Check your portfolio as seldom as possible. The most significant gains made in the market come from researching diligently and holding for the long term.
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