New York, NY / SEAPRWire / September 5, 2021 /– One of the world’s most famous investing mantras is: “Sell in May and go away, come back on St. Leger’s Day.” It refers to the practice, long-held by summer-loving Europeans especially, of not investing during the summer months and instead taking a break until September (when the St. Leger’s Day race was once held in the UK).
This is because – in traditional markets at least – the summer tends to be a quiet time for investors, with stocks as investors do indeed take some profits to spend on their vacations. This has been proven by a number of studies that have shown a slight market downturn during this period, including one by LPL Research that shows the “Sell in May” mantra holding true in 7 out of 10 years between 2010 and 2020.
Aside from the potential profit to be had from taking a break from the markets in the summer, we all need a holiday. It’s important for even hardened cryptocurrency traders to down tools and recharge their batteries for a while. This doesn’t mean, however, that you have to put your portfolio totally on hold during this time. Instead, you can look for a way to earn passive income on your summer vacation.
An easy summer of passive income
Thanks to the advent of decentralized finance (DeFi), earning income on your cryptocurrency and digital assets is easier than ever before. Since 2017, a plethora of DeFi banking and digital wealth management platforms have emerged that allow investors to earn more than 10% Annual Percentage Yields (APYs) on their assets: from USD-backed stablecoins, to Ether and Bitcoin.
YIELD App, for example, offers up to 20.5% APY on USD Coin (USDC) and USD Tether (USDT), 16.5% on Ether (ETH) and up to 12% APY* on Bitcoin (BTC)**. All a user needs to do to earn this on their assets is to open an account, provide their identification documents, deposit their assets and then click invest. After that, they can go away until St Legers day – or as long as they want.
The power of compound interest means that, while an investor is enjoying some well-earned time-off, their digital assets can be working hard. For example, over the three months from May 31 to September 1, a $10,000 investment earning an APY of 20.5% would earn $525.71, while the same amount earning 16.5% would earn $421.03. That’s enough to pay for at least a week of the vacation an investor might be taking as their investments are working hard – or even more for frugal holidaymakers.
Passive income for all seasons
Of course, passive income isn’t just for the summer months, either. Even once an investor returns in the autumn and becomes more active with their portfolio, holding a portion back to continue earning interest can provide a good buffer in volatile periods. Indeed, YIELD App figures suggest that those earning 12% APY on 1 Bitcoin during the May 2021 downturn would have lost $2,000 less than those not using a passive income strategy.
Passive income, then, makes sense in a number of scenarios and strategies: on stablecoins for the ultra-cautious, or in the essential ultra-cautious part of any investor’s portfolio, as well as on Bitcoin, Ether or alternative digital assets for long term holders uninterested in trading the highs and lows of the more volatile cryptocurrencies.
The summer months are an ideal time to experiment with passive income. While an investor is busy enjoying the beach, they will be less inclined to check their portfolio every hour, leading to a very pleasant surprise once they fire up their laptop back at home. And if these easy, stress-free returns appeal, they may choose to stay invested, turning $10,000 invested at 20.5% APY into $12,274.54 over 12 months – a return of $189.54 per month – all without lifting a finger the whole year.
IMPORTANT NOTICE: This article does not constitute financial advice and is for informational purposes only. Investors should be sure to consult a professional advisor before making any investment decisions.
*APYs include a base APY and a bonus paid in YIELD App’s native token, YLD. The base APY for USDT and USDC is 10.5%, 6.5% in ETH and 6% for Bitcoin.
**The Bitcoin fund is currently closed to new deposits until it reaches maturity on October 10, 2021. It may re-open for a period before this date. Users will be notified by email.
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