Crypto & Investing — Getting Started
Core Investing Concepts¶
Before the Investment Coach makes any recommendation, you should understand the language it uses. This is the Foundation stage curriculum — the minimum vocabulary to make sense of your first analysis.
Index Funds & ETFs¶
An ETF (Exchange-Traded Fund) is a basket of stocks you buy as a single ticker. Instead of picking individual companies, you own a slice of hundreds or thousands at once.
| ETF | What It Tracks | Why It Matters |
|---|---|---|
| VTI | Entire US stock market (~4,000 stocks) | Maximum diversification in one ticker |
| VOO | S&P 500 (top 500 US companies) | The benchmark — "the market" |
| QQQ | Nasdaq-100 (tech-heavy) | Higher growth potential, higher volatility |
Starting recommendation
VTI is the default Foundation-stage recommendation. It's the broadest diversification you can get in a single purchase — a 0.03% expense ratio means almost none of your returns are eaten by fees.
P/E Ratio (Price-to-Earnings)¶
The P/E ratio tells you how much investors pay for each dollar of a company's earnings.
P/E = Share Price ÷ Earnings Per Share
| P/E Range | What It Suggests |
|---|---|
| < 15 | Potentially undervalued (or slow growth) |
| 15–25 | Fair value for most companies |
| > 25 | Investors expect high future growth (or it's overpriced) |
P/E alone doesn't tell the full story
A high P/E might mean the company is overpriced — or that the market expects massive growth (like NVDA during the AI boom). Always combine with other indicators. The coach never relies on one number.
RSI (Relative Strength Index)¶
RSI measures whether a stock has been bought or sold too aggressively in the short term. It ranges from 0 to 100.
| RSI Range | Signal |
|---|---|
| > 70 | Overbought — price may have run up too fast, pullback possible |
| 30–70 | Neutral zone |
| < 30 | Oversold — price may have dropped too far, bounce possible |
RSI doesn't predict the future — it flags when momentum is stretched. The Investment Coach uses RSI alongside seven other technical indicators (SMA, EMA, MACD, Bollinger Bands, ATR, VWMA, MFI).
Dollar-Cost Averaging (DCA)¶
Instead of investing a lump sum all at once, DCA means investing a fixed amount on a regular schedule.
Why it works:
- When prices are high, your money buys fewer shares
- When prices are low, your money buys more shares
- Over time, your average cost smooths out and you never catch the top
This is exactly what the Investment Coach recommends in Foundation stage — "30% tranche now, scale in over 60–90 days" is a DCA approach that manages entry-timing risk while still getting you exposure.
Diversification¶
Don't put all your eggs in one basket. Diversification means spreading money across:
- Multiple stocks — if one company fails, others cushion the blow
- Multiple sectors — tech, healthcare, energy don't all move together
- Multiple asset types — stocks, bonds, cash
Why VTI is already diversified
Buying VTI gives you ~4,000 stocks across every sector. One ticker, instant diversification. That's why it's the Foundation stage default.
Risk vs. Return¶
Higher potential returns always come with higher risk. There are no exceptions.
graph LR
A["Savings Account<br/>~4% return<br/>Near-zero risk"] --> B["Bond ETFs<br/>~5-7% return<br/>Low risk"]
B --> C["Index ETFs (VTI)<br/>~8-12% return<br/>Moderate risk"]
C --> D["Individual Stocks<br/>Variable return<br/>High risk"]
D --> E["Options/Crypto<br/>Extreme return potential<br/>Very high risk"]The Foundation stage locks you to ETFs specifically because of this — you learn the fundamentals with moderate risk before taking on more.
Foundation Stage Rules¶
- Only buy ETFs — VTI, VOO, or QQQ
- Never invest money you can't afford to lose — bills and emergency fund come first
- Use dollar-cost averaging — don't try to time the market
- Check your portfolio weekly, not daily — daily price swings are noise
- Read every analysis the coach gives you — the education layer is the whole point
TL;DR
Foundation stage uses six core concepts: ETFs (diversification in one ticker), P/E ratio (how expensive earnings are), RSI (is momentum stretched), dollar-cost averaging (spread purchases over time), diversification (don't concentrate risk), and risk/return (higher potential always means higher downside). Learn these first — every analysis will reference them.
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