Goals and pitfuls when investing in cash crypto stocks gold 20 October 2025

What is investing?

Investing is allocating some capital or risk to an assets in the hope that it increases more in value. The moment one makes a decision to either own an asset or risk some capital on the basis of that asset declining in value, they are investing.

Whilst this article may seem quite nuanced and focused towards gold - it is more than that, the goal of this article is to get you to think more critically about opinion across all forms of media. It is important to think about objectives when investing and define your own approaches through consistency.

Main attitudes of investing

• Short term gains
• Long term gains
• Borrow against an asset for reinvestment
• Never selling an asset to maintain purchasing power
• Moving in and out of assets to generate cash flow
• Buying an asset early and watching the value appreciate overtime

There are many ways individuals and financial entities invest to try and increase the net asset value

Disclaimer - not financial advice

Nothing in this article is intended as an incentive to invest, we are not regulated financial advisors, this article is opinion based. Please seek independent financial advice from a regulated financial adviser.

A recent podcast by Brent Johnson

Link at the end of this article.

We are big fans of Brent Johnson and his "Dollar Milkshake Theory." Brent tries to convey the importance of not being alarmist in regards to mainstream and alternative perspectives on how the market is moving. This recent podcast focused upon this massive increase in the price of gold. To summarise the main proposition within the podcast is challenging, but his main premise predicated on the idea that banks are not exiting the dollar. The US is not losing its dollar hegemony. Johnson predicts this will eventually occur as part of his "Dollar Milkshake Theory" - the time is not right now, according to Brent.

We can see why somebody such as Brent would put these points across and we are not saying that these are precisely his thought processes;

• Investments Managers' role is to maximise capital growth and minimise capital loss. We could say that an investment manager just saying put all your money in gold and sleep on it really isn't their predilection
• Investment managers will have models of the market as to when to enter and exit positions, It tends to be substantially different as to when retail enters and exits positions
• Brent may simply be trying to warn many of his viewers not to just keep buying gold in a pre-apocalyptic frenzy

The importance of validating opinion

If correct in our understanding, Brent asserted that central bank buying of gold has not gone up. Indeed, if gold had not appreciated in value over many recent years, we would find that their actual holding would be incredibly low in terms of balance sheet value.

So what does one do when faced with opinions like this? You either take it at face value or you dig into it more for yourself.

We do not have access to a Bloomberg Terminal, or other financial institution feeds. Much of the information available on gold holdings can be questioned yet at the same time there are plenty of publications online.

We asked ChatGPT to give 10 years historical gold buying by central banks. To be honest it was pretty incredible to see it go through 25 websites reached some dead ends go back to other sites find other pages and eventually produce some tables of data and charts.

ChatGPT sourced Estimated Central Bank Gold Purchases Chart 2015-2024

Based off of this chart will you reply to his podcast with this comment;

"Hi Brent. I don't have access to the feeds you do, perhaps your data says otherwise. Maybe I should put some of these charts on my site at some point. Asking ChatGPT to create a gold chart of World Central Bank Buying in Tonnes per year shows the following;

• 2014, increased markedly to 650T in 2018

• Dropped down to as low as 150T in 2020

• CB Gold purchases sky-rocketed to over 1100T by 2021 (pandemic money printing - suspicious or what)

• It has stayed above 1000T to 2024

• The WGC describes modest selling by central banks for the last two years

Thus, banks have already accumulated shed loads of gold and even if they stopped buying their reserves are way higher.

According to this data, it is misleading to say that Goldbugs are misrepresenting gold acquisition by central banks."

Instantly when viewing the YouTube comments from another account this comment did not appear despite us getting a reply to it from another user.

We could ask the following questions;

• Is Brent right?
• Does Brent have access to data that we don't?
• Was ChatGPT right or wrong? We shouldn't purely rely upon AI either
• Motivations. What are our and Brent's motivations?

A further question we asked ChatGPT was is there evidence of large central bank gold selling over the last two years?

The reply was "no".

So what is going on?

What is the goal of investing really?

All that investing really is, is deciding when to buy and sell an asset to try and own more overall net asset value. That is it!

What are pitfalls of investing?

There are way more pitfalls to investing then there are benefits. Yes devising a system for maintaining and potentially increasing wealth is probably never more Relevant than now. One good reason being the huge gains in hard assets such as gold, silver and Bitcoin. Gold right now, if we look at a long term chart looks like Amazon. Whether this is the true moment for a Fiat based collapse we don't know but We could be at that point.

Not getting in early enough

When Bitcoin broke that all time high and went to $17,000 in 2017, only to fall back to around 20% to 30% of its high, most listen to the mainstream discourse and saw it as risky. Those that were thinking $17,000 was too much we're now thinking that $4000 was too much. Bitcoin recently reached $126,000 only two pull back to $104,000. It is now moving higher again as at 20th October 2025.

Buying at the high

When announced it is at its highest price ever few humans alive would say, "It is only going higher from here." Yet mainstream and alternative media are full of those saying "We are early in this cycle." Many decide to buy a large amount of that asset to believe the hype, only to see its price collapse.

This can happen across all asset classes.

Not taking profits

Greed and fear are negative emotions stopping an individual from entering and exiting a position. Just looking at the gold chart everyone that owns gold is assuming the predictions of gold doing at least 2 to 8 times more in value. They are expecting to achieve life-changing gains, to create generational wealth.

We have to take something off the table.

Not looking at how asset prices behave

Those looking into investing and trading will start to look but what is known as "technical analysis" (TA). TA is for many, the mechanism millions of traders swear by. TA is considered by many a decent risk management tool as to when to enter trades based upon a probability on the direction of an assets price.

One of the things that most technical analysts don't seem to do based upon our consumption of their content is to look at moves on swings over a short-term to mid-term basis.

We won't go into significant detail on this, but to give a flavour for this;

• What happens after a flash crash? Pick 2 high market cap, 2 mid market cap, 2 low market cap assets from CoinGecko. Look at these assets to see if they have any flash crashes. What was the chart doing before the flash crash and what did the asset do after the flash crash? We are thinking in terms of recovery and continued downside
• What happens with assets that have a big daily range? Perhaps a 10% swing between the highs and lows on a day? We think that there are often moves between the highs and lows multiple times when this occurs and you could potentially Buy and sell multiple times on the volatility acid or make more cash
• What happens if there has been 2 or more big gains on an assets value? We tend to think there will either be a reversal, or a new level formed

The main challenge we see is nuts many technical analysts don't seem to cover these types of phenomenon and focus more on TA patterns.

Not using strategies and systems

By establishing consistent approaches to your trading one will remove emotion from the process. Establishing systems and strategies gives you a consistent way to evaluate and execute your trading.

Following the wrong thought leaders and influencers

It truly is not the intention to lambast Brent Johnson. Honestly, his insights are frequently fantastic and the guy is a fountain of knowledge. The difference is, Brent is putting out institutional financial opinion to retail investors. The tools and systems somebody like Brent has access to are completely out of reach out of retail investors. Professional investors may have advanced hedging strategies, will use many industry risk metrics, have exposure to more sophisticated financial instruments and have different risk appetite.

The one thing we keep reminding ourselves of is that retail investors are not a financial institution with access to large financial technology teams, quants, risk departments, and the many different operations departments.

Not using automation to manage your portfolios' assets

At a very primitive level simply setting up automated payments so different policy is optimal over doing this manually. We have busy lives and can easily get sidetracked. A personal example is buying a stock after significant research and just leaving it in a portfolio. It is easy to forget that you have this investment and hard to still to keep watching the price if you were intending to take some profits from it.

For this reason we created automated trading software for cryptocurrency. On our relatively small portfolio, we can see hundreds of trades a day returning (including balance moves for off-risk and on-risk).

Not diversifying risk

We won't go into any detail on this one, so please do your own research.

Not understanding the implications of taxation

This is a very wide and specialised area. All we are suggesting is that for some people changing the country of residence maybe a solution.

Misunderstanding putting cash into an asset class versus taking it out

This one really hits home. We have covered this one before but it is of paramount importance to understand what true wealth and worth is. To do this we are going to focus on cash, gold, property and Bitcoin.

Cash

Let us imagine you were given $100,000 Still working and didn't need to do much with that $100,000. That money is going to depreciate in value substantially. So significant is the basement of currency and therefore loss of purchasing power the disc net present value is going to collapse in potentially a matter of years.

Gold

You decide to take $10,000 and buy some gold. Over a few years, this gold has increased 2X, meaning that you now have $30,000 worth of gold. Whilst it is easy to buy some physical gold and set it back to your dealer, and then buy it back again when the price falls and continue this pattern, in practise it is quite a hard process to stick to. Most people tend to just buy gold and hold it. Gold is doing unbelievably well at the moment - there is every chance that it could collapse way below what you bought it at.

The one thing we say repeatedly on social media regarding gold is to own it physically yourself. We are convinced that many of these gold thought leaders are trading paper gold for fiat gains and to potentially buy physical for storing in a vault.

"Don't be the patsy!"

Bitcoin

You decide to buy $10000 of Bitcoin. It could realistically fall to $2500 of its price, Gold, seemingly less likely?

The difference between Bitcoin and both fiat and gold is its tradability and portability. For retail in particular, it is genuinely possible to put a set amount of Fiat into Bitcoin;

• Sell at a high
• Buy it at a low
• Sell it at a high
• Buy it at a low, and so on until you get back the Fiat that you put in

Nothing stops you selling all your Bitcoin, buying gold with the profits, taking some cash out, etc.

Cryptocurrency, because of its liquidity and portability is the best asset (in our opinion) to try and get back the cash you put in.

Property/Real-Estate

Given that property means so much to so many people, in so many different ways, this is a hard one to cover. If we take the majority of homeowners, they will;

• Have taken out a mortgage
• End up paying off much more for the property then they bought it for
• Selling the property for a nominal profit

The typical homeowner does not own more than one home, aims to own it outright by paying off the mortgage, hopes to either downsize, and hopes to pass on some of the value to their descendants.

To the individual, property is on a liquid asset. Property takes a long time to sell, where we can sell a property quickly if we are engaged in a chain then we still may be stuck.

We cannot get into the multitude of scenarios that can unfold when buying and selling a property. The personal take on it is that for the majority it's really isn't the long term wealth building vehicle that most allude to.

Paying for subscriptions for insights, automation and technology is not a bad thing

Those lucky enough to have a pension will be paying fees on a yearly basis. Any trading accounts where you buy and sell assets will charge you some amount per purchase or per time period. Why not subscribe to quality media and services? The team at script to start oh do my bone insights via the ability we have in building analytics software yet we also explore different services.

What may appear to be a cost may indeed be the difference between making profits and treading water.

Conclusions on the pitfalls and goals of investing

Everybody is on their own individual journey, no two people are exposed to exactly the same information at precisely the same amount of time. The perspective that we hold may be completely alien to others and completely inappropriate for most.

We felt compelled to write this article because of a potential sea change and vilification of those going down the hard assets route, the same time acknowledging that those well into this hard as it roots but instead of their own perspective on their standing.

The key objective for us personally in investing is to get back the capital that we put into any asset. Those investing in cryptocurrency it can become a completely risk free investment. The reason is because once you have got back the cash you've put in you have no physical allocation of capital in there by yourself. Nobody explains this fact. This also means there is no point putting lots of cash into cryptocurrency in our opinion. Once you are fortunate enough that you think is reasonable get back the cash you originally put in, as long as one doesn't margin trade - everything else is risk-off.

Thank you for taking the time to consider our opinions and please do much more research on investing.

Gold hits an all-time High - What comes next...?

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