Hello everybody, I hope you all are having a wonderful Wednesday. Today I wanted to talk about something a little different, risk tolerance. Knowing how you're going to deal with the downturns in investing is very important to your overall success. These times can make or break your investing career. A very important part of this is knowing when to stop investing, when to diversify, and when to build a cash pile. This is all a case by case basis depending on each and everybody but there are a couple of things you can do to protect yourself.
Don't Gamble What You're Not Willing To Lose
Firstly, I would advise you to never invest anything you wouldn't be willing to lose. We live in a chaotic world, more so now than ever. If you couldn't watch your investment lose 50-60-70% and hold on even if you still had conviction I would not advise you buying that particular asset. A lot of people I know will take on huge risk that effects their lives. So much so that it is all they can talk about, they try to shill others into investments, they can't sleep at night. It's a horrible spot to be in, especially if you're down. An investment should never effect your life so much that it starts to take control of yours, unless in a positive way. Everybody will find themselves in a losing situation at some point in their investment careers and choosing what to do can effect their success tremendously.
Diversification Is Key
Remember that there a lot of Vehicles to park your money in. Diversification is the key to protecting your wealth as you build it. It helps limit the amount of risk that you expose yourself to. A good way to diversify in Splinterlands for example could be to start buying cards you don't own, gold foils, more dec for airdrops, additional SPS if you believe in it, possibly a plot if you have the budget. Diversifying will not only limit your risk, but also ultimately make you feel more comfortable making more money work for you.
Cash Is Not Trash
Some people find themselves in a position where they believe everything is too expensive to buy, and that adding additional assets would be a risk. This is a common spot to find yourself in, especially if you have recently experienced a market run up. You should remember that it is completely fine to hold onto cash in a situation you don't feel comfortable investing in. As you build yourself a cash pile you may find yourself a new venture, or find one of your own get down to a level where you feel comfortable investing in again. Not only will this make you feel more comfortable but you could possibly luck out and get some nice assets on sale!
Conclusion
I think everybody should be comfortable when they are investing. When you are uncomfortable, you are emotional. When your emotions are at the drivers seat it is always a recipe for disaster. Investing should always be a calculated decision and never a choice based on your feelings and emotions. Don't put yourself in a spot where you could lose a lot of money because you didn't understand the ramifications of your decisions. Thank you everybody for reading my post about risk tolerance and I hope you all have a Splinterific day!
Giveaway
Thank you everybody who participated in yesterdays giveaway I want to congratulate @nysster for winning the exploding rats!
Today I will be giving away a rare venari seedsmith! All you have to do to participate is leave a comment down below! It is not required but I really do appreciate all of your upvotes, PIZZA, LUV, LOLZ, and all the other tip tokens! I'm a Dad that is the sole provider and I'm trying to make a bit more money from my cypto ventures to help out and every little bit really does help.
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