๐๐ป๐๐ฒ๐๐ ๐๐ถ๐๐ต ๐๐ต๐ฒ ๐ง ๐ป๐ผ๐ ๐๐ถ๐๐ต ๐๐ต๐ฒ โค๏ธ
This is a throwback to an article I wrote back in 2021 for eToro. You can read the full version here: www.etoro.com/news-and-analysis/copytrader/investing-psychology-investing-with-your-brain/
Everyone at some point has panic sold or FOMO bought some stock or crypto because it will "fall to 0" or because it's "going to the MOON".
Later you realize that your actions are totally off of your initial strategy and you regret that, at least when it goes wrong.
Especially now that the market is uncertain, let's revisit some tips to avoid emotional investing:
๐ญ. ๐๐ผ๐ฐ๐๐ ๐ผ๐ป ๐๐ต๐ฒ ๐๐๐ฟ๐ฎ๐๐ฒ๐ด๐: When you begin investing, itโs important to create an investment plan followed by a time-horizon goal. If you have the patience, a long-term vision is an optimal way to invest and easiest to stick with, and it prevents you from getting caught up in short-term traps.
๐ฎ. ๐๐ด๐ป๐ผ๐ฟ๐ฒ ๐๐ต๐ฒ ๐บ๐ฒ๐ฑ๐ถ๐ฎ: Donโt follow the crowd, and stop watching what the media is saying. They tend to over-exaggerate, especially when the market is correcting or going down. Instead, look for other experienced investorsโ opinions and always look for a bullish and bearish view on the situation.
๐ฏ. ๐๐ถ๐๐ฒ๐ฟ๐๐ถ๐ณ๐ถ๐ฐ๐ฎ๐๐ถ๐ผ๐ป ๐ถ๐ ๐ถ๐บ๐ฝ๐ผ๐ฟ๐๐ฎ๐ป๐: Diversification will help you get through volatile times. Of course, there will be times when the entire market is going down, but the more frequent situation is when some sectors will be down and others wonโt, which offsets the losses for the losers. Therefore, diversify your portfolio by investing in different types of assets and sectors (i.e. Stocks, Cryptos, ETFโs, Popular Investors).
๐ฐ. ๐๐ผ๐น๐น๐ฎ๐ฟ-๐ฐ๐ผ๐๐ ๐ฎ๐๐ฒ๐ฟ๐ฎ๐ด๐ถ๐ป๐ด: This is the most underrated strategy that can produce positive results regardless of the market condition, especially in a downward trending market. Using DCA (dollar-cost averaging) enables you to buy shares at lower prices and, therefore, as the name says, you will be averaging your buying price. This means that once the market recovers, you will recover at a faster pace. When the market falls, view it as an opportunity to dollar-cost average your investment positions.
๐ฑ. ๐๐๐๐ ๐ฏ๐ฒ ๐ฝ๐ฎ๐๐ถ๐ฒ๐ป๐: You already know the saying โInvesting is a marathon, not a sprintโ, but really, this is true. The more you try to get rich quick, the greater the chance you will lose your money. Usually, the sprinter is emotional, so being consistent over time is extremely difficult. However, being an emotionally controlled marathoner will generate for you consistent and long-term returns.
$NSDQ100$SPX500$BTC... Show More
I'm dollar cost averaging and diversifying for a year and a half and nothing seems to go right! When this terrible bear market will end? if ever, I'm really skeptical judging by the political (Biden/Trump) and economic (Powell) leaders of the most powerful country in the world (don't know for how long... Show More
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Sat Oct 12 2024 18:46:00 GMT+0000 (Coordinated Universal Time)