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It's not easy to invest in crypto today, there's a ton of traps and pitfalls and just as many coins/tokens to accompany them. But some of these traps and pitfalls are a product of your own brain. The least we can do is be aware of the tricks our mind plays on us and try to minimize their impact on our decision making.
Now I'd like to focus on the ordeal we go through every time we make a choice and how it impacts our final decision.
"Why is it so hard to choose a coin to invest in/DCA?"
"Why am I not happy with the choice I made?"
"It's too overwhelming, I can't decide."
I've stumbled across a Mind Field episode on the freedom of choice and this particular bit resonated with me. So I decided to share it with you. Go watch the whole thing though if you want to follow along (Mind Field - Freedom of Choice on YouTube)
Most people would agree it's good to have a greater variety of choices. It is objectively better to have more things to choose from, but does it make you happier in the aftermath? No so much as it appears.
First, Michael and his team offered strangers to choose from two kinds of jellybeans.
I made it crypto-themed, so you can relate too.
The subjects made their choice quickly. When asked later, they didn't report any regret – they were absolutely happy with the choice they made.
Other subjects were offered a greater variety of choice. How will it affect their decision making and, more importantly, how content will they be with their choice afterwards?
It took the subjects much longer to decide (expect for the last lady). And none of them were happy with their choice – "I should have gone with..." The last lady in the video made her choice almost instantly as she saw her favorite fruit, but then she regretted not having considered all other options...
Choice overload tends to make you less happy with the choice you made and promotes second-guessing.
All we can do is be aware of this phenomenon, and to keep our sanity, we should make a conscious effort to minimize its effect on our mental health and future decision making.
Now, let's move on to something called Choice Paralysis.
The study compared two store displays. One with 6 varieties of jam, and the other one with 24.
Although fewer consumers stopped at the displays with limited choices, 30% of them made a purchase. Only 3% of customers bought jam when at displays with a greater variety of choices.
New crypto investors find themselves overwhelmed by the available coins/tokens to choose from. Plus, more emerge every single day...
My conclusions:
- A healthy restriction of options can actually help you choose and then feel better about your choice. I'd recommend sticking to projects you can understand (to some degree).
- Always think in terms of the future, not past. Or hindsight will drive you crazy and make you do foolish things.
- Only fools never change their mind, so reevaluating your portfolio once in a while is still healthy. Again, the angle is not "man, I should've this instead", but "I'll rather do this from now on"
- It's a bliss to know which coins to DCA into and to just keep doing it.
