The current market state is very difficult for all investors. Whether you are in crypto or in the stock market. I think every body is trying to stay safe and not lose even more money which is why I want to talk about some approaches towards investing! In this article we will discuss some lessons that should be followed any time but especially while investing and especially during a bear market with recession potential. With this being said, let鈥檚 jump straight into the first point to discuss.
Not A Game
Many people would wonder that this has to be said, but I saw so many people already wasting their money because they thought a coin project sounded funny or they read about a stock on reddit. Yes, it seems like that investing is getting exposed to more gamification and that many people, especially the younger generation does not care about their money. But I think it still ahs to be said, investing is not a game!
There are also people out there gambling their life savings on the next Elon Musk Token or trusting their money into a project that is promising them an APY over 500%. This leads me to a very similar conclusion! First of all, do only invest money that you can afford to lose. Some risk is alright, but your complete life savings into one big scam? Please guys do not do that!
Stay Humble
Next up we need to talk about all these professors out there who think that they have figured out the market just because their return after the pandemic was in the double digits. Well, guess what Mr. Brain: If you would look at the complete S&P 500, it made around the same return which means that your portfolio is nothing special. Every time you think you have figured it out, a new curveball comes around the corner and will make you start from scratch. This is the reason why I am trying to stay with projects that I value and I understand. Furthermore, it is always a great idea to stay humble, keep your head down and keep grinding. Nobody likes show-offs anyways :D
Always Account for The Worst
I don鈥檛 know why I like this point, maybe because I am a very pessimistic person or maybe because I just do not like to be disappointed but I always account for the worst. If I invest my money, I certainly do not want it to lose all its value and certainly do hope that it will raise in value. But I am not going in with a lot of expectations. Whenever I account for the worst I try to make my game plan around this scenario and whenever a better scenario comes around I will have extra buffer in my portfolio. For me this worked out pretty well, but I can also see how other approaches might be very valid or even better than this.
Habits Stay
One of the most important things that I want to share is that habits are there to stay. Whether you have bad or good habits, they will haunt you for the rest of your life. Whether you are used to getting drunk every Friday or just like Junk-Food, this habit will first of all be very difficult to get rid off and second of all you get the negative dividend in a few years. Same goes into the other direction: If you eat healthy and do sports, it will pay out positive dividends whenever you get older. This can also be applied to your financial habits. If you are used to spending money on useless stuff, you will probably not feel it now but in a few years you would realize that all this money, if invested instead of just thrown away could have been worth so much more and brought you closer to financially independence.
Don鈥檛 Push It Out!
Last but not least I want to tell anybody who is finding an excuse for not investing: Stop doing that. There will always be a reason not to get into the markets: Either the market is too hot or it is going down anyways. In both cases: You can not time the market anyways, so just stop searching for excuses and get your time in the market! As we all know, time in the market always beats timing the market. And with that being said, I want to close this article 馃槉
Published by ga38jem on
LeoFinance
On 20th January 2022