Hi, I’m a student in high school and I wish to start investing in order to assist my parents pay for my education fees for university. I understand that there is money to be made in the short term and the long term with regards to investing. Currently I have the option to invest a couple hundred dollars, but I would prefer gaining some experience by starting with a few bucks. As such, I have some questions:
- Is it better for me to invest in cryptocurrencies in the long term? Or should I invest in stocks? Or should I do both?
- If I invest in Bitcoin or altcoins, what is the best way for me to start investing as I have little to no knowledge and no experience in investing?
- How can I minimize risk whilst increasing my potential for reward? I do know that low risk=low reward but there can always be an exception.
- What is the best Coin for me to invest in at the moment? Currently I have no job and I do not plan on getting one any time soon, but I shouldn’t have a problem striking a deal with my relatives.
- What is the likelihood of Bitcoin prices dropping by a few thousand Dollars so that I can buy more satoshies for less? Similar to what happened last Sunday.
- Is there profit in cloud-mining for someone like me? And how do I verify that the company is not a scam?
Thank you for the help.
You’re ahead of the game getting into investment early, that’s for sure. The usual advice is that the younger you are, the more risk you can afford to take. The thinking is that if your risky investments go bad, you have more time to earn the money back. However, as you want to invest with a view towards paying for uni, instead of your distant retirement, it’s probably best not to take on excessive risk.
- If you’re investing $100 per month, then I’d say it’s best to be fairly focused in your portfolio. Stocks and cryptos are very different asset classes. Cryptos are a lot more volatile than most stocks, so more risk but also more reward… I’m not sure of your location, but in many places it’s difficult to invest in stocks without paying a lot of fees and so on. You should probably consider something like a market tracking index / ETF instead of individual stocks. These tend to have low fees.
- The best way is to buy the coins and store them on your personal wallet. See our Buying Guides and Wallet Reviews section for more details on exchanges and secure wallets.
- As a newcomer, it’s really hard to minimize your risk and max your reward. Generally speaking, the longer ago you got in, the further Bitcoin would have to fall before you experienced a loss (as opposed to a lesser profit). Getting in now unavoidably risks the likely possibility of being in loss… However, if you hold despite a fall in price, Bitcoin *should* eventually recover and rise higher. This is the rationale behind the buy and hold / HODL strategy employed by many Bitcoiners.
- The best all round coin is Bitcoin. The best coin for making big, fast gains is probably something else, some coin which will shoot up 300% in a day, but I couldn’t tell you what that coin is… Only the pump and dump team responsible for pumping it can, and they only tell their friends (and the rest of us when it comes time to dump). You can always take a gamble on likely-looking coins (if you follow altcoins for a while, you should learn to identify them) but I wouldn’t risk more than 10% of your investment capital on that sort of speculation.
- Well, big moves up or down in Bitcoin are pretty much inevitable. Throughout its history, Bitcoin has had many such moves. If you want to wait for those kinds of dips to buy, that’s a good way to play it – buy low, sell high is really the essence of trading, after all. I can’t tell you when the next big dip will occur, only that it will come around eventually. Look for fork drama and big news events. For eg. *if* this Bitcoin futures thing is cancelled by the CME, I’d expect a substantial drop.
- Ofir has you covered on the subject of cloud mining. Check out his guide to it here: https://99bitcoins.com/cloud-mining-profitable-just-evolution-scam/ and a review of Genesis here: https://99bitcoins.com/genesis-cloud-mining-review-scam-legit-investment/
Note, the above advice is all just my opinion. I’m not a financial advisor. Hope things work out for you! My advice is to keep it simple, buy a little Bitcoin each month and perhaps hold some cash back for dip-buying opportunities. Put some into an index fund too, if you want to learn about traditional markets.