Portfolio Revealed for 2022!

How goal setting and financial discipline can generate wealth?

I did not have any investment philosophy or discipline when I started my financial journey. When we start investing, often we do not have specific goals in mind, at least true in my case. An investment with a purpose and an intent can bring great results to your overall wealth and thus is essential. When it comes to goal setting and discipline, a few things have to be followed, things that get often unnoticed in investing.

So, today, we will try to cover some of those practical, essential strategies, in my opinion. We will also cover my best eight bets for the long term and short term and explore the rationale behind those investments.

Interestingly, when I asked a few of my friends and even relatives about their investments, most of the time, they responded with either impractical goals or no goals at all.

Analogously, if you think about it when you set out to go somewhere, put gas in your car, pack some foods and beverages to find out eventually that you are confused. As a result, you ended up making multiple short trips and undecided journeys to a few places, leading to disappointment and drawdown of your investment in the form of gas consumption and food wastages.

Ring a bell?

A goal-less investment is similar to that, except the fact that you may have a giant drawdown financially, and such a drawdown can lead to deterioration of your financial health. You may never recover those investments despite your enduring belief in their recovery. I can understand because I felt the same when I lost 90% of my investment in one project. Trust me, I have been there and also got out of that vicious cycle of hope and despair.

Why Goal setting is important?

When you have a goal in your mind, you know your progress in the form of overall work done and the time taken to reach that progress. A goal shows you the target you need to achieve but without the influence of emotions. Emotion is a significant factor in financial discipline. Deciding out of emotion may go terribly wrong, and in most cases, it does go wrong. Knowing the progress of your goal is essential as it will set your eyes to ground reality without fear and greed.

Let us take an example:

Suppose you have done due diligence on a project, and the project turned out to be good with solid potential and fundamentals. However, you did not have any goal while investing. Let’s say you invested a sum of 1000 USD. After two months since investment, your portfolio is down 30%.

What will be your natural response?

You might want to save that 70% of your portfolio, as you might feel that “I still have 70% and I can invest in a solid project like Bitcoin and then I will be safe”.

Most investors without a goal have the same frame of mind and thus panic sell. And then the funny thing happens, the project you sold soars up and gains 200% in the next two months of your selling.

How would you feel then?

Terrible right! It’s because you let your emotions rule your decision, and hence without having patience and conviction, you take the decision and panic sell your asset.

Now suppose you set a goal of 300% return for a term of 2 years. The project you invested in skyrocketed 400% within six months because of certain developments. However, due to greed, you stay invested in the hope of its further price appreciation. Unfortunately, by the end of the year, the project went down, and the price was corrected by 70%., which is fairly common in Crypto.

What will be the value of your investment.?

It will be just 1200 USD. So by the end of 1 year, you have only 20% return on your investment.

Learnings from the above hypothetical situation:

If you had not sold out in the first case out of fear of price correction, then you would have made 2100 USD with a return of 110% in just three months.

Similarly, if you had set your goal and exited a portion of your investment when the project went 400% up, you would have made 4000 USD, and you could have withdrawn half of it and stay invested with half of the portfolio for the long term as a hedge against the risk.

So goal setting with discipline is essential to rule out the emotion from the decisions. If your research is rock solid, then a proper goal will bring wealth and a sense of accomplishment and confidence in your approach. With this confidence and set targets, higher returns can be generated and constantly added to the portfolio switching from one project to the next potential ones.

Portfolio revealed:

Here is the list of projects that I have invested in. I will try to bucket them into three categories, which are my way of prioritizing any investment returns. I will also briefly explain the rationale behind the invested projects.

The three buckets are:

1. Safe returns(Expected returns: 100%-150%)
2. Moderate returns(Expected returns: 200%- 400%)
3. Risky returns.(Expected returns: 500%-1000%)

In each category, I will provide two projects, one which is already established in the market and well known to investors, and the other may not be very well known and might be a potential gem.

Category Safe:

The first one on the list in this category is Ethereum. Yes, you heard it right.! With its Eth2 rollout, Ethereum will become a great asset in the long term and thus a great addition to the portfolio.

The second one in the list is a hedge against Ethereum risk, and it is none other than Terra (Luna). Algorithmic stable coin will be the backbone of the Digital assets, and Terra is constantly adding developments to its ecosystem. The recent development of 1Billion UST-Bitcoin reserve backing is one of the few reasons why Terra can change the game.

Category Moderate:

The first one on the list is Solana which has already achieved a decent return in the previous year since its inception. With its cheap transactions cost and blazingly fast network, Solana may become a universal choice for investors and creators from NFTs, Metaverse point of view. It will act as a hedge if Eth2 fails to meet the investors’ expectations.

The second one on the list is Chainlink. If there is one thing to say about Chainlink, it has been the most beaten-down crypto project since last year. Despite its use cases as the leading Oracle player, it still has a lot under its hood to perform. It enhances the potential of smart contracts by bridging real-world data and off-chain computation while also maintaining the security and reliability guarantees inherent to blockchain technology.

Category Risky:

The first one on the list is Near protocol. An alternate ETH2 already inaction has a lot of room to grow. For more information on how Near has the potential and how it can change the game, you can refer to my previous article here.

The second one on the list is Oasis Network, a privacy-focused platform for Finance and data economy. With lots of high-profile collab and trust bestowed by Meta(Formerly Facebook), BMW, etc., it has a lot to deliver. Its EVM, Emerald, and Paratime Cipher have been live on the main net, and this project still has to get high narration. It’s an excellent opportunity to add this to the portfolio at such a low price.

Bonus:

As the year unfolded with a big bang of Metaverse and NFTs, I am very bullish on those spaces.

The first on the list is Yield Guild Games, which I already covered in the previous article.

The second one on the list is Effinity (from Enjin Ecosystem), which is compatible with the Polkadot platform. Their team has been developing well outside the crypto space for the last decade. It has a particular aim of low transaction cost and interoperability, which will define its future. Their focussed user interface has lots of appeals, and the user experience will be a great asset to its potential.

Closing thought:

I hope you enjoyed the article and the list. The above list of projects is the outcome of my investment philosophy. The idea is to generate the wealth and at the same time protect it from further degradation, and so the buckets are created keeping in view the balance of the portfolio.

Quick question:

If you want to add something very potential project to the list, what would that be?

Let me know in the comment.

Disclaimer: None of the content, in part or whole, articulated here is any financial advice. This article is about a part of my investment philosophy and a medium to generate awareness in the financial journey. Please consult your financial advisor before making any financial decision.

Apologies for the above disclaimer!

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