97
Market has been down so much, everyone has been panicking whether to sell their losses or cut their profits. And I believe if you’ve read this, you’ve either paper hands or still hodling through. So what should you do? Here’s what I think.
Just Do Nothing
To determine whether your investment is doing well, you’ll need at least few years of hodling before seeing the results. Such market dip does not determine how well you’ll come out of your investment few years later. Sometimes doing nothing could be the best thing you could do, waiting for market to consolidate then DCA into your most conviction asset if you still have cash. Always remember that there'll be a dip after a dip.
Why People Sell? & Why Does The Market Dip?
1. Fun Fact: Do you know that the market valuation actually does not really correlates to the performance of the company or coins? Sometimes such market dip could be due to market manipulation or algorithm done by market makers. Machines could control 80% of these sell off of the US stocks. Therefore, stock prices can be totally irrational and make no sense.
2. Most people would leverage badly during bull market as they’re greedy and when their assets get liquidated, sell offs occur.
3. Most new or even experienced retail investors would invest more than they could afford. When market dips badly because of such news, they would paper hands as they could not tolerate the losses. These would probably snowball to many retail investors as well.
Where All This Is Going?
This market correction is exaggerated as interest rate is still at all time low compared to 3% 2 years ago. When inflation rate is still so much higher than interest rates, it represents that there is still cheap money. Business would still borrow money to fight inflation with low interest rates in the long run. There are many reasons for it to be bullish in the long run referring to the market trends from centuries ago.
1. For example, in the past whenever Fed announce interest hikes, the next few quarters would be very bullish instead after it’s implemented.
2. Another example would be having inflation rate at 7% and interest rate at less than 1% would meant borrowing money would be cheap and there would be an arbitrage to fight the inflation.
The market would continue to be bearish probably till the US mid term election (because that’s the trend every time too) before it rally on to the next year. Expect bearish market in the midterm and bullish after the market has priced in.
It’s Never Easy….
The hardest part through investing is not about learning about stock picking, doing technical analysis with macd, sma, etc. If you were to ask a veteran investor, they would actually say it’s about having conviction. Hodling throughout market dips or crashes would be the toughest for an investor.
So The BIG Picture Is
Just sit tight and hodl it through and always remember that with every dip, market would bounce back even stronger. If possible, DCA into whatever you’re invested in. Just know that “Even gods can’t beat DCA” When in doubt, always zoom out of the box and look at the bigger picture of why did you invest in the first place. You’ll eventually find yourself better there. We invest because we want to be financially freedom after 10-20 years rather than 1-2 years. So just hodl it through and I wish you all the best!
Do use my promo code if you plan to sign up the relevant accounts. Since it's a bonus for us anyway!
Referrals Promo Codes:
For CRYPTO.COM app - Use my referral link https://crypto.com/app/md5ty7gyjx to sign up for Crypto.com and we both get $25 USD :)
For KUCOIN exchange -https://www.kucoin.com/ucenter/signup?rcode=rBEH1LK
For Syfe - I invest my money using Syfe, you should try it as well. Use my referralcode: SRPRTX3ZN
For Revolut -https://revolut.com/referral/fabianonsc or just dm me
