A serious statement. But for many, it’s an eye-opener.
Entering the financial sphere, you must be prepared for your assets to depreciate relative to the dollar.
And they can depreciate over quite a long distance.
Imagine you decided to get into crypto. Watched a couple of videos, read a few articles.
Gained confidence and assembled a portfolio of 5-7 assets. You sit content, sipping coffee at Starbucks, proudly adding the status of “crypto investor” to your Instagram profile.
A week later, your portfolio has fallen by 10% in dollars. After a month, another 15%. And after six months, your portfolio is down 47% from the initial funds.
So, does crypto turn out to be a big scam? Did the assets in your portfolio turn out to be not so promising after all?
What’s the problem?
It’s in your market expectations and your portfolio. Supposedly, it should always grow and constantly bring profit. And all you need to do is lie on the couch and watch.
Secondly, the problem lies in the distance at which you evaluate the performance of assets in your portfolio. Six months is an insanely short period for cryptocurrency. And not just for cryptocurrency, but for any investments.
You’ve probably encountered situations where an acquaintance asked you about crypto and where to invest?
Everyone had such an acquaintance or several guys with a similar request.
So, you can’t advise them anything at all, except to study investment theory and financial markets.
Otherwise, they’ll buy an asset with their last pennies and wait for it to grow quickly. And if the growth doesn’t happen, they’ll start to panic, call crypto a scam, and call you an idiot for recommending buying Bitcoin.
If you add an asset to your portfolio, you should track the results of your investments over a period of at least 3 years.
And how does it usually turn out?
People with a lack of financial literacy enter the most complex financial sphere to quickly make money.
And when their portfolio falls in dollars, even though they may have bought good assets, they start to panic and sell everything to reclaim what’s left.
And you know what scares most people? The need to just wait and the ability to follow their plan.
I often (really often) get questions like the following in private messages:
“How much will I earn per month if I buy BTC and ETH into my portfolio?”
How should I answer such a question?
I have no idea. People want an answer to a question that gives me only 0.5% of the necessary information.
For the hundredth time, I’ll repeat the most important thesis – invest for the long term and learn to wait.
If you’re not prepared for the possibility that your portfolio may be in a dollar slump for a couple of years, then investments are not for you.