Then you should take the following tips to heart. This way, you avoid panic in the event of a crash and the exchange rate falls by 60-80%, which is not uncommon with digital currencies.
“Never invest in something you have no idea about”
Before you take money in your hand and invest, deal with the one you want to invest in.
For example, if you are investing in a digital currency like Bitcoin, you should be dealing with blockchain technology and Bitcoin yourself. Read books, go to seminars, or watch YouTube videos.
Only when you have understood everything and are you then sure that you believe in the technology or the currency, then go to the next step.
By the way, this rule applies not only to digital currencies, but to all asset classes such as stocks, real estate, bonds, precious metals, etc.
“Why do I want to invest?”
If you have dealt with the technology and the currency, then you have to think carefully about why you want to invest in Bitcoin, for example.
Is it because you want to make quick money? Or for old-age provision? Or maybe being able to pay with Bitcoin in the long term?
Answering this question is extremely important and you should allow yourself several days or weeks before you make the first purchase, because only then will you not panic if the currency rate falls once by 20, 40 or even 80%. Then remember your “why” and stick to your strategy.
“What is my time horizon?”
Next, think about how long you want to invest WITHOUT selling. Is it a day to test buying and selling Bitcoin? Is it months or years?
A tip, even if it is only retrospective and does not have to apply to the future.
If you bought a digital currency and held it for at least 3.8 years, you never made a loss.
As I said, that does not mean that if you buy today and do not sell for almost 4 years, you have made a profit.
Historical data are facts, but facts never apply to the future. The next 4 years can look very different from the last 4 years.
For example, my time horizon has been 12 years since 2018, that is until 2030. Before that, I will not sell any digital currency I own, no matter what happens in the market.
Why, I’ll explain that to you below.
“Never listen to others, only to your mind”
How many times has it happened that someone has said to you, he has invested and that is mega good and you should also invest.
I am often spoken to by someone who has heard of Bitcoin and asks me if I should invest or if it is still the right time. Or someone speaks to me that he is already invested and I notice that he only did it because someone else recommended it to him and he knows nothing about blockchain technology, has no idea about Bitcoin and has not answered the question how long he wants to be invested at all.
Some of them answered the question of “why” for themselves, but wrong. Because if you invest because someone recommended it to you or even tells you that you are getting rich, then it is a wrong “why” or you have taken over the “why” from the other person but you have not given any thought to your “why”.
Therefore I can only recommend, never listen to others, not even to your family!
You are welcome to listen to the recommendation, but before you buy anything, pay attention to the tips in this article and only when you have decided for YOU that it is a good investment for YOU and you can still sleep without panic even with an 80% loss Invest.
Now you have got 4 tips that you should always deal with before investing. No matter whether it is digital currencies or another asset class.
It takes the longest to deal with the asset class itself and to build up knowledge here. This can take several months depending on how much time you invest.
Then think not only 2 minutes, but several days about why you want to invest. Then set your time horizon and no matter what comes, stick to this time horizon and never sell earlier, no matter what others tell you.
Only now do you look where you can buy Bitcoin, for example, and invest in this currency for the first time.
Believe me, no matter how the course is going, whether 100% in plus or 80% in minus, you remain calm and don’t panic like most because you have your strategy.