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Why Your Investment Portfolio š¼ Is like An Airplane āļø
Unbroken Investing
April 20, 2024 ā¢ Estimated Reading Time: 6 minutes
Main Article Preview (Unbroken Insights): "Why Your Investment Portfolio is Like An Airplaneā
Newsletter Content
Hereās How The Market Has Been Performing*
Name | Current Value | 1 Week Return | 1 Month Return | 1 Year Return |
|---|---|---|---|---|
DJIA | $37,986.40 | 0.01% | -2.87% | 12.43% |
S&P 500 | $4967.23 | -3.04% | -4.07% | 19.56% |
NASDAQ | $15,282.01 | -5.52% | -5.47% | 25.70% |
Bitcoin | $ 64,175.62 | -4.44% | 3.65% | 122.65% |
Ethereum | $ 3,089.03 | -4.81% | -2.17% | 59.52% |
*As of Close of Current Market Week
Our Favorite Unbroken Investments
Name | 1 Month Return | 1 Year Return |
|---|---|---|
Fund 1 | 16.97% | 155.64% |
Fund 2 | 13.19% | 184.62% |
Fund 3 | 5.83% | 156.63% |
Fund 4 | 16.92% | 124.12% |
Access these investments by joining the Unbroken Investing community. |
Investor News Of The Week
Yesterday, Bitcoin Completed āHalvingā For The 4th Time
In other words, the reward earned by crypto miners has dropped from 6.25 bitcoins to 3.125 bitcoins. The logic behind the halving process is that it is intended to slow the rate at which new bitcoins are created, thereby restricting supply and potentially increasing Bitcoinās value (assuming demand remains level or increases).
Reduced rewards could prove challenging for mining companies (examples include companies like Riot Platforms $RIOT and Marathon Digital Holdings $MARA - both of which have had significant stock market pullbacks in 2024 after explosive returns in 2023); however, as halving events are known future milestones for Bitcoin - several mining companies have transitioned towards evolving their sources of revenue beyond mining while simultaneously finding cutting-edge new ways to operate more efficiently when mining.
One potential area to watch in this pursuit will be the intersection of the artificial intelligence and crypto mining markets with many miners leveraging AI to operate more efficiently AND to diversify into new business operations with their excess computational processing.
Either way though, unless invested in or operating a mining company - perhaps the most noteworthy takeaway for many for the 4th Bitcoin Halving event is thisā¦
The following chart illustrates the approximate max return for Bitcoin each halving cycle - from the cycle start to the Bitcoin high price during said cycle.
Halving Event | Price At Halving | Cycle Max Return |
|---|---|---|
#1 - 11/28/2012 | $12.50 | 93x |
#2 - 7/9/2016 | $638.50 | 30x |
#3 - 5/11/2020 | $8,475.00 | 8.7x |
#4 - 4/19/2024 | $64,350.00 | TBD |
What returns will Cycle #4 bring? Participate in the discussion - and hear more of our thoughts - by joining us for our next Digital Asset Investing call (hosted each Thursday for Unbroken Investing members).
Unbroken Insights
Why Your Investment Portfolio Is Like An Airplane
Imagine you are flying in an airplaneāas I am right now as I write thisāand an engine goes out. What happens? If the plane has six enginesāthree on each sideāthe pilot can probably continue the flight and many passengers may never know the difference. If the plane has four enginesātwo on each sideāthe pilot can still safely land the plane. If the plane has just one engine on each side, that could be a bit scary. If the plane only has the one engineā¦uh-oh!
What does that have to do with investing?
Imagine your investment portfolio is that planeā¦letās call it your IPP (Investment Portfolio Plane). Each market you invest in is one engine. If all your assets are in one market/engine (such as the stock market) and that market goes downā¦uh-oh!
That is why we recommend SIX different markets. If the stock market goes down, we barely even notice. This is how we look at itā¦
On each side of the IPP you have one Safety Investment. It may not be the fastest, but it has almost 0% chance of failure. No matter what happens, your IPP is not going to crash.
On each side of the IPP, you also have a Turbo Investment. They definitely propel the plane faster, but there is a little more risk of failure (this is where most stocks are). You need these in your portfolio. Otherwise, your IPP will not be going fast enough and may never get you to the destination you want.
Finally, each side of the IPP has one Super Sonic Investment. These are what make your IPP go REALLY fast, but they are not as reliable. These are almost like the booster rockets for space-bound aircraft. These rockets āfall offā once they reach space, but without them, the aircraft would have never made it to space.
If all you use are Safety Investments, it will take forever to get to your destinationā¦if you ever get there at all. If all you use are Super Sonic Investments, you might get there really fastā¦or those engines could fail and you might crash.
By using proper diversification, you get the balance of performance AND safety. You have the security of knowing that you will not crash while also knowing that you are doing everything possible to get to your destination of financial freedom faster.
We discuss this topic in greater detail (including classifying various investments across each category - Safety, Turbo, Super Sonic) in the Unbroken Investing community; join or login to learn more.