You know those mornings when you wake up and your favorite coin has increased in value fifty percent?
That'd be nice.
But, those mornings are rare.
I was hoping for more before the summer arrived and there is still a chance, but it might not arrive.
All speculation.
There are a couple of (near) certainties in regard to this, because there is value in the anticipation of the rise, right? We have a goal in mind for the future and when it happens, we get that feeling of success, that dopamine hit of having our expectations met.
Sure, we might be taking a "calculated" risk, yet a lot of us are likely far less capable and are guessing. This doesn't stop us from feeling right when that pump happens, does it? And, while we know that history tells a different story, we might even dare to dream that it will keep going up even higher. More dopamine at the thought of future dopamine hits.
And at least for a lot of people, there is the social aspect of investing too and while it sucks a bit to talk about the dips, that satisfaction of getting it right from time to time tends to increase the discussion. With crypto of course, a spike on a token is often when the entire market is "upwardly mobile", which means there is likely mainstream media attention on it also.
Everyone likes a little competition, right?
At least when winning.
Investing evokes the same responses in us as a source of entertainment, because it sets up the environment and provides events that trigger our natural responses. It is very much a gamified experience and while we might love the ups, they are only as triggering as they are because of the downs too. If there was too much certainty, we would get bored. If there is too much ambiguity, we feel that we have no control.
There needs to be that balance.
And then, unlike most games, there are very real-world ramifications, because the potential for gain and loss impacts directly on our lives. This makes it more stressful than pure entertainment, especially if we get the sense that we need the win in order to enjoy our lives. Most people do not perform well under "gotta win" circumstances and I think it is the same for investors. Having skin in the game is good, not being able to lose is bad, because inevitably, there will be loss.
At least in the short term.
It isn't loss until it is realized at the time of sale though, so up until that point, there is still hope for some gains! The game continues on until there is nothing left, with very few people actually getting out completely - after all, why would they if they are successful?
Success is addictive.
A good run here, a good guess there and suddenly, the feelings of success come flooding in and especially during a bull market, it is very hard to go wrong. The pain comes in the amount of gain missed, not from counting the losses. And this is why it can be so hard when the bear comes out of hibernation to play the game too, because humans are adaptable.
But we adapt to good conditions faster than the bad.
Months and months of downward movement depression can be wiped away with a single pump, bringing with it the feeling of hope that this might be the start of the big one, the one that solves our financial problems and makes our lives matter. But then, the next kick comes as the next dip hits and the depression returns.
Almost daily.
While the markets might not be as predictable as we would like them to be, we as humans are pretty easy to read, even though there is variation between each of us. This is why I believe it is important to build an investment mindset, which includes understanding our own conditions, motivations, and how we react to different circumstances, because they affect the decisions we make. It doesn't mean that we make more right decisions, but it can mean that we have a better experience of our decisions and the outcomes we get.
It is like training to play a sport.
It is nice to wake up to positive news, but since we know that it is more the exception than the rule, we shouldn't be affected by a downturn either. Having a longer strategy smooths out the volatility and knowing that this is the case, means that we don't have to be reactive to the markets - or react impulsively. We can smooth our emotions, cost averaging our experience by spreading our emotional weighting across time, rather than on narrow points of time, the ups and downs.
I wonder, if we could average the feelings of our investing experience across time, would it be averagely positive, or negative? What does your intuition tell you?
Maybe it depends on the morning.
Taraz
[ Gen1: Hive ]
