Don’t Be An Emotional Investor
It’s difficult to do, I know. When you think about dropping your hard-earned money into something that could potentially go to zero, it can be nerve-wrecking. But look at it from a different perspective if you can. The market is not out to get you. At the same time, the market is not your friend. The market is what it is. Say it out loud a few times and you’ll start to realize why getting emotional when trades/investments don’t go your way is kind of foolish.
I say this because I went through nearly every emotion when I got back into investing, and mainly in cryptocurrencies. Last year when my portfolio was going up, up, up, I was a different person. I had made more money in a few months than the whole year at my day job. I wasn’t doing a lot of trading, mainly value investing (which is still 90% what I do in crypto), but I felt like a WIZARD. One of my big wins was Stellar (XLM). I bought in at under .02 and just watched it take off. Did the same with Ripple (XRP), but I got out of my position too early (you live and you learn).
Then of course January hit. Everything was just crashing through the floor for folks new to the market, and no one knew where it would stop. Because of that, I cashed out on the coins I didn’t have 100% belief in, just to be safe. Greed is what kept me in certain positions longer than I should have been, thinking things would turn around. I was studying technical analysis and it seemed like every time there was about to be a breakout, we went back down.
The anger and resentment finally set in, when I realized I left A LOT of money on the table waiting for the “bull” to come back. Sadness came next, and I saw/heard it from a lot of the folks who had gotten in months prior. Some of the horror stories I heard about people taking out second mortgages for bitcoin, or getting personal loans to buy cryptocurrency blew my mind. Why would anyone take that level of risk for an investment in such a new technology without widespread adoption?
Then it hit me; EMOTIONS WERE THE REASON!
People saw what looked like a get-rich-quick-and-painlessly card, and played it. Many lost and even more walked away before seeing how the game truly ends.
Now I’m not going to get into how much money I lost, because it’s pointless. I know people who lost WAY more and I lost a good deal. I also know people who lost next to nothing and were still complaining (the “I put $10 bucks in and lost $5 dollars in a day! I quit crypto!” types). In the grand scheme of things, we have to ask ourselves why we are really here. I had to do it a few times, because when things were GREEEEEEEAT(tony the tiger voice), I forgot. If you still don’t know the answer, let me tell you....
We are here because we are the pioneers of this thing. Forget about the investment side of it for a moment and think about the technology and all the good it can do out here in the world. Blockchain providing immutable records for pretty much any industry. Cryptocurrencies and tokens being used in place of fiat or for some other kind of value-based exchange. I’m here because I believe in the next 10 years my kids will be paying for things with cryptocurrency. Do I know which ones? Of course not. But I know mass adoption is coming, and that excites me more than the returns that come with being an early adopter.
Now, with that said....I’m not just dropping my money into any old coin/token out there. Do your research!!!! And by that I don’t mean seeing which coin is trending on twitter. If you’re into ICOs DEFINITELY do your research! I had an annoying experience with one that was advertised as available to US investors and decided to do a 180 right before hitting exchanges (worked out in my favor, but that’ll be for another post). Find the companies that you believe in. With cryptocurrency, I believe it makes way more sense for most people to be value investors as opposed to hardcore speculators. Value investing led me to stellar and KIN. Speculating had me left holding a bag of dentacoin for a moment.
And for crying out loud, If you find yourself in a bad position, don’t stay in it and be hopeful if all signs point to it going down further! Learn how to cut your losses and take a moment before jumping into something else that looks like a “sure thing”. That time in between your next buy will allow you to actually think about the moves you’re making.
And when all else fails, DOLLAR COST AVERAGE!