Take 100% of the risk or manage it?
Risk adjustment and buy and hold are two different investment strategies.Â
Risk adjustment is a risk management technique, a method used to account for the potential risks in an investment.
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It involves analyzing the potential risks of an investment and then adjusting the investment to account for those risks.
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This can involve a variety of different techniques, such as diversifying a portfolio or hedging against potential losses.
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With Libertify, your risk is adjusted constantly on a per asset level, on the fly (usually every 1-2 days), when the market goes up and when it goes down.
This is done by getting you in or out of the market dependent on the market we face. In riskier conditions, we put you more into cash (stable coin), and in less riskier conditions, we’ll increase your position of the asset. In short we alternate your cash: asset ratio depending on the market and your tolerance to risk – yes, it’s personalized too.
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On the other hand, buy and hold is an investment strategy that involves buying assets and holding onto them for an extended period of time, regardless of market fluctuations.
The idea behind this strategy is that over the long term, the market is believed to rise, and holding onto assets will allow investors to benefit from this long-term growth.
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This strategy is often considered to be a more passive approach to investing, as it involves holding onto assets for the long term without making frequent trades. But what this essentially means is when the market drops, you experience 100% of that drop. In other words, you are always exposed to 100% of the risk when you buy and hold, and that is easier said that done.
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The case for risk adjustment
In general, risk adjustment and buy and hold are not necessarily competing strategies.
However, both strategies have their own advantages and disadvantages, and the best approach will depend on an individual investor’s goals and risk tolerance.
However, there are some potential advantages of using risk adjustment over the buy and hold strategy. They include:
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Risk adjustment allows investors to more accurately assess the potential risks of an investment. By analyzing the potential risks of an investment, an investor can make more informed decisions and potentially avoid making investments that are too risky.
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Risk adjustment can help investors manage their portfolio more effectively. By adjusting the portfolio to account for potential risks, an investor can potentially reduce their exposure to those risks and protect their investments from potential losses.
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Risk adjustment can help investors diversify their portfolio. By allocating investments across a range of different assets and sectors, an investor can potentially reduce the overall risk of their portfolio and improve their chances of achieving their investment goals.
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Risk adjustment can help investors adapt to changing market conditions. By regularly reviewing and adjusting their portfolio, an investor can potentially take advantage of opportunities as they arise and avoid potential pitfalls.
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Risk adjustment can help investors achieve their investment goals more quickly. By carefully managing the risks in their portfolio, an investor can potentially generate higher returns and reach their goals more quickly.
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Risk adjustment can help investors sleep better at night. By reducing the risks in their portfolio, an investor can potentially avoid the stress and anxiety that can come with making risky investments.
Sounds great. But how do I do it?
Risk adjustment is now accessible to all.Â
Unfortunately, to trade risk adjusted is complex and has typically been exclusive to highly trained investment professionals.
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This is due to the fact that:
- the market needs to be monitored 24/7,
- risk or opportunities must be detected, and
- risk-reward calculations need to be made quickly and accurately in real-time.
Furthermore, for greater control you may want to do this on a per portfolio basis or on a per asset basis.
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If you are not a seasoned trader, risk adjusting sounds daunting. But you can see how it’s a necessary endeavor. The question is however, how could you possibly do to it without the training and while maintaining your day job? That’s why we established Libertify.
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With Libertify, you can now trade risk adjusted in a single click. Libertify will monitor the markets, detect risks and opportunities, and make the risk-reward calculations for you – all in real time and according to the your personal tolerance to risk.
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Risk adjusted investing is now available to all, at extremely affordable rates. To manage your risk, and enjoy all the benefits start here.