Basic Tips: What to Do Once Your Crypto Assets Decrease in Price?
Almost no one knows when the crisis will hit and everything will collapse. It is difficult to predict, it is even more difficult to exit on time and realize assets with profit. The best thing is to always be ready or, in other words, to diversify your portfolio from the very first investment. Here are some basic tips for your investment strategy.
The most important point is profit-taking. Bitcoin has grown from $20,000 to $30,000 – sell a small percentage of your portfolio and withdraw your profits. Taking profit allows you to protect yourself in the future from the loss of all funds, and also gives you access to the cache, which can be used to enter the market during a crisis.
Don't panic and don't “panic-sell”
When the decline has begun, the best thing is not to panic and not rush to sell everything, trying to minimize losses. First, there is always a chance that this is a small correction and after three days everything will go back up: you lose twice, selling cheap and buying high. Second, decisions to buy and sell stocks should be taken with a cool head. Therefore, if the entire platform is red, close it. Otherwise, do business.
One of the most popular investment strategies is playing the long game. In this case, even the biggest drop will bounce back in the future. Selling worthy assets is not cheap, it is better to wait it out. Therefore, we will repeat the advice: when the entire platform is red, close it and leave the computer.
Experts advise not to sell, but buying is quite possible. To do this, it is best to have some free cash and time to study the market. Let's explain: in a crisis, shares of even quite strong and financially sound companies are falling. When you have access to financial resources, stocks or cryptocurrencies can be purchased.
It is important to understand that a big crisis often clears up the market: companies with bad financial histories may not survive. Therefore, it takes time to study the financial condition of the company and only then invest in it, and not blindly buy something that is cheap.
There is only one conclusion: we are not buying cheap stocks of any companies, but stocks of good companies that have fallen in price, which can quickly increase what they have lost. Most often, these are companies that have quick access to the consumer, which means the growth of revenue: shops, banks, tourism, IT business. Experts advise even to have a separate document where you will make a list of stocks that can be purchased during the recession – prepare in advance.
The standard rule is to enter a crisis without credit. It applies in investments very much: if you see that chaos is going on around, first take care of closing all positions where you trade "with leverage". If your portfolio "sank", you can wait it out. But when the loan also hangs over you, it can end badly.
Give in to media panic
Each investor should be accountable for his actions and understand why he or she invests in each specific asset. The fact is that on the Internet you can find dozens of different opinions on each specific topic: some write that bitcoin is over, others that its next goal is close to $100,000. A person believes in what he wants. It doesn't have to be this way: when investing, the press should become a tool for obtaining information, but not an adviser. All the more so during a crisis and general chaos.
Collapse, crisis, and falls are constant attributes of the market. You need to be ready for this and teach yourself to take it for granted. History shows that we will still see growth over the long term. Therefore, if you invest with a planning horizon of 10-20 years, the crisis should not be a problem. The main thing is to prepare for it in advance.
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