2020 Investments – Forehand Financial

This blog is meant to inform those who are interested in understanding more about Ethereum, thinking about investing in ETH or curious on a high level understanding of what Ethereum is. I tried my best to remove as much financial jargon as possible, but additionally aimed to reduce cryptocurrency technical lingo. If you would like a deeper more technical understanding of Ethereum, please see the link at the very bottom(relevant articles from Forehand Financial). Please enjoy!

Ethereum is essentially the city layout, but things can be built on the layout of the city. While one cannot necessarily change the layout (without further releases of Ethereum’s network), one can build on top of it, in fact many projects and other things. Homes, parks, bridges, games, trees, markets, hospitals – you name it. These things that you can build on top of the city layout are essentially non-controlled applications on Ethereum’s network.

Picture a large vibrant city, with no controlling body or government. It is large, growing and there are a lot of transactions that occur throughout. This city has no center power, so it is not completely controlled by any single business or person. If one business were to go bankrupt, the city will still be able to operate – because there is no central point of failure.

The things that go in the city do not always need to be new. They can be old businesses or buildings, that need to be renovated. They can also be started completely from scratch, like a brand-new coffee shop. The people that transact in the city can do so directly with each other. There is not a bank, card processor, government entity or financial institution taking a cut of the profits on the transactions of the city. Only transactions occur between the people and that is it. No reseller, no middleman – just you and the other party (Unless you dictate otherwise).

Without police or a central authority to ensure people are operating in check, the individuals/business/groups in the city enforce the rules. It is a collaborative effort that everyone in the city partakes to make sure the city is operating in the best legal and ethical manner possible. All those who do participate in helping to police and ensure ethical behavior will receive a little money in exchange for doing so. This money is called Ether.

Smart contracts run the city. If someone commits a crime and is found guilty in the court of law, no worries, the smart contract will execute due to the terms and conditions written therein. If a borrower defaults on a lender, again no problem, the lender will receive the collateral automatically as written per the contract.

Ether is the electricity, the movement, or the lifeblood of the city. Without Ether, the city will turn into a ghost town. People who better the city(stake), receive the Ether as a type of incentive to continuously improve, refine and weigh in on improvements.

Revisiting the city layout from earlier on, the city wants individuals building things whether it may be for monetary gain, improving how things are done or simply for enjoyment. If a guy named Sam wants to build a few properties to rent out, he will then pay charges to the city. Individuals who decide to live in Sam’s properties likely will need to pay to use the property. If Sam’s properties use a lot of the city’s resources (electricity, water, etc.) he will need to pay more, if Sam’s properties use less resources, he will need to pay less Ether.

As dictated from the founders of the city, only 18 million Ether will be created per year. To keep the city in balance, and prevent drastic inflation, this number was decided on by the founders to help promote transactions amongst individuals. This number will keep the city operating at a healthy level.

All in all, Ethereum is a city. ETH is the lifeblood of that city. Both are needed to create the excellent fin-tech ecosystem we have today. The city is ever evolving with further upgrades to the layout and the technology that the city can be built upon.

Relevant Articles from Forehand Financial: https://wordpress.com/post/forehandfinancial.com/443

Article References: https://commons.wikimedia.org/wiki/File:Smart_contracts_in_insurance_policies.png

Disclaimer:
Nothing stated in this article is a recommendation from Forehand Financial to buy or sell a particular security or asset class. You should wisely consider your tolerance for risk, time horizon, and financial goals before making an investment. With investing, you run the risk of losing money, always read an investment prospectus and make an informed decision before allocating capital to a particular investment.

When investing it is of the highest importance to look at trends and determine how things are likely to pan out. In this article I will not get political, rather I will discuss things as a matter of fact from a policy perspective.

Generally speaking, Trump’s policies favor corporations with the 21% tax rate instead of the former administration’s 28% tax rate. While I thought the likelihood of a Trump second term was a strong possibility, with my investment portfolio I never put all my eggs in one basket (and good thing that I didn’t).

It is well known the Trump cut ties with the Paris Climate Accord a few years back, and what this meant for the progress of EV’s, alternative energy funding, and sustainability is that it took a few steps back from the investment growth in this area for a couple of years. Knowing that democratic candidates tend to favor policies that are for sustainability and green in nature, while also looking at the current state of the world from a sustainability perspective before the election I took a sizeable investment in the following stocks, and have yielded excellent results.

My Best Investments are NIO, XPENG, LI, PLUG, and Cryptocurrencies.

To get kicked off with what these stocks are, I will give a high-level overview. NIO, XPENG, and LI are essentially EV startups in China. With progressive policies under the new administration and the yearning of individuals and companies to be more conscious when it comes to their ecological footprint, I am confident these stocks will continue to grow over the next decade and beyond. I’ve seen countless videos of China where the smog is so thick you couldn’t see several buildings over, even though it was completely sunny out. A dirty musty fog is caused by internal combustion vehicles. My average returns on these stocks are 60%+, because of Biden’s stance on the EV market, and the need to transition to a more environmentally sustainable future. I saw when Trump losing this taking off much more and hedging my portfolio in my direction wouldn’t only mitigate losses in my “Trump” stocks per se but would bring tremendous gains as this industry is young, evolving, and is gaining visibility from some of the most important companies in the world.

On a side note, some may ask why I am an oil shareholder when the best possible answer is to transition to alternative energy? Why don’t I put my money where my mouth is with my oil money? It is not necessarily a black and white answer, and it is the obligation of the oil companies to adopt and progress on the energy transition to be carbon neutral. Should they go out of business? No. There is still a need for oil and gas until the population completely transfers to a more environmentally friendly alternative, that being EV, Hydrogen, or something else.

Gary Gensler, Biden’s new pick for the Commodity Futures Trading Commission (alongside expected inflation under a Biden administration), has brought neck-snapping returns to my portfolio this year. Specifically, my holdings constitute around 5% of my net worth in chronological order and are the following by amount. 1)Bitcoin, 2) Ethereum, 3) Tezos, 4Litecoin, 5) Cosmos, 6) Chainlink, 7) Band, 8) Stellar 9) Compound 10) EOS. I also have some XRP which is a decent crypto asset for transacting, but I am hesitant to mention it here because of its centralization.

My advice to those trying to make a lot of money in this space is to be patient and invest in projects you believe in, that have great growth prospects. There are entire books written on addressing the project fundamentals of these projects. Will any of the projects that I invested in go defunct? Maybe. Does it matter? No – because it is worth the upside risk, and I am diversified.

Administration and policy investing are so important when it comes to investing. Investing is not just about looking at the current health of a company, rather the entire picture – and beyond. Historical track records can mean a lot. Have you heard the saying I do not have a crystal ball? Looking at a team’s talent, vision, product-market fit, and use case viability is another way of assessing the potential and whether to invest.

If I can leave any parting advice to you today it is this. My best investments this year were based on assessing what is likely going to happen in the future, through hedging bets and taking a risk. Green policies (EV Stocks) and Inflation (Crypto Assets).

What do you think is going to happen in the future and how will you position yourself?

Have you ever said, “I wish I could have gotten into TSLA/AMZN/GOOG/FB/Bitcoin/Ethereum when it was under $100 a share/coin”?

There are other opportunities as ripe as those were, now you can… Think Ahead.

Tag: 2020 Investments

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My Best Stocks and Crypto Investments in 2020