Investing is a big deal
Investing is a big deal for everyone. As Investopedia describes, investing is the act of allocating resources, usually money, with the expectation of generating an income or profit. Yes, people invest not for fun but mainly for profit. And of course, we expect to earn more for the money that we invest. But what if the profit is uncertain? Like the ones in the stock market, most especially in the crypto market, where your profit relies on the increase of prices?
Fear in investing
That’s what a lot of people are scared about. Prices in stock and crypto markets are so volatile that in just a few seconds they would change. You can earn big in these markets but you can also lose big. A lot of people even lose their millions in these markets. But losing can be avoided and gaining can be achieved with the right strategies.
Let’s tackle about the 6 strategies to win in these scary markets. But before that, please remember that we are talking about INVESTING and NOT TRADING.
Trading is a kind of investment where you play with the market prices. It’s like a short-term investment where your money moves as the market prices changes. It is where you need to study the markets’ movements to be able to buy and sell wisely. And without proper guidance and knowledge, this is where people lose big time.
So, to avoid putting your money to waste, here are 6 tips for you.
1. Invest what you’re WILLING TO LOSE.
If you want to invest, I suggest that you start small. Don’t go big immediately just because of FOMO (fear of missing out). And invest only according to what you know. That means, allocating an investment as to the percentage of your knowledge about the market. For example, if you’ve only learned a little about crypto but you’re willing to try it out, then invest at least 5% of your income or even lesser.
In taking a risk in stock and crypto markets, some would say that you should think about your investment as dead money. You should consider them as gone. That’s why experts would say that you should only invest the money that you are willing to lose. Don’t lend money to invest nor rely for profit immediately on the money that you just invested. Earning won’t be overnight. Don’t depend your daily needs on it too.
These markets need to be studied. But worry not if you have no time to study about it, tip #2 is for you.
2. Invest for the LONG TERM.
Long-term investment could save you from the fear of losing the money you’re investing. It is one of the safest ways to invest. And if you have no time to study or to watch out for the price change, then long-term investment is the best way for you. Stocks or tokens from good businesses have the possibility of going high in the future. And there are a lot of good companies who have great potentials for bigger growth. Which is why tip #3 is also very important to take note of.
Also, to avoid getting scared by the market’s uncertain up and down trends, I advise you not to check your portfolio every day. Remember, you are for the long term.
3. Invest into QUALITY businesses at REASONABLE PRICES.
There are a lot of businesses going in the market right now. Some are so enticing because they are so good in marketing and advertising. But the things you need to take note when investing are those that are liquid, stable, have the reason to stay in the market and have the potential to grow more in the future. Like those in the banking, commercial, holding, consumer, telecoms and property industries which have become parts of people’s needs. Jollibee in the Philippines’ stock market for example.
In crypto on the other hand, you need to be more careful, especially now that a lot of NFT games are being built. You need to read the company’s whitepaper or do some research first before investing. YouTube, Google and even Twitter could help you on your research. You have to be careful for scams too because a lot would offer you freebies but would only take out your information, especially your wallet address. Always be vigilant and never take your chances on freebies who are run by hackers and scammers.
You have to remember to buy low too. When prices are so high and a lot of people are earning, don’t rush on buying. They are earning because they have bought it when it’s low. So, wait for it to go down before you buy and sell some of it when prices go high.
4. Invest by DIVERSIFICATION.
Aside from investing into quality businesses, it is also important to invest by diversification. This technique is to save you from losing big too. Don’t go all out in one business. Diversify by allocating a certain percentage on quality businesses. For example, you’ll invest 25% in banking, 25% in consumer, 25% in property and 25% in holding for your stock market investments. For your crypto investment, you could invest 25% in Bitcoin, 25% in Ethereum, 25% in NFTs like SLP (Smooth Love Potion) or in VIS (Vigorous), then another 25% in AXS (Axie Infinity Shards) or in MATIC (Polygon).
That way, you can avoid losing big when one of your investments goes down and you will always have something that could pull up your investment.
5. Invest REGULARLY.
Another thing that you should remember when investing is to invest regularly. Like allocating 10% of your income every month. Investing regularly is significant especially for long-term investments. Think about peso or dollar-cost averaging. Prices changes anytime, and the change it could have in a month’s time could be different. So if you bought a token today at high a price, then after a month you bought for a low price, the average price of your investment would decrease and could lead you to earn more in the future if it’s price will go higher.
If you want to grow your investment, don’t rely merely on the price increase. Make it a habit to save for your future.
6. Invest EARLY.
Investing was mistaken by some as “for the rich”. Some would also say that they’ll invest when they reach a certain age or until this or that. But I suggest you invest early. The fear of missing out (FOMO) usually happens when one took all his time thinking about investing or not. As early as possible, start investing. It’s always better to invest early especially for long-term investors. Imagine the growth of your money when you retire and you invested at the age of 20. Millions might be waving at you already.
Now that you’ve learned about these 6 tips, I hope that you’ll have the courage to start saving for your millions now. Yes, millions – aim high and invest for the long-term!
When is the right time to invest? It is NOW!
But always remember to do your own research and keep learning.
