How to Deal With a Crypto and Stock Market Crash
It all comes down to expectations...
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It’s Your Fault
Over the last few months, crypto has dropped 50% from all time highs while the overall stock market just had 10-15% correction.
However, if you were positioned in certain technology stocks, you could be down 40%+ right now.
This often leaves people angry, upset, and emotional. That being said, the only person to blame in a situation like this, is yourself.
I am being blunt for a reason: it’s necessary.
Accountability is the only way you’ll ever win in this world.
You can’t blame the market, you can’t blame YouTubers, and you can’t blame people on Twitter.
When I say you must blame yourself, it doesn’t mean you shouldn’t have made the investment.
It means, you didn’t have realistic expectations or you are investing with money you can’t lose.
What has happened recently, was always possible.
If you go into a investment with the recognition that the asset could lose half of it’s value, you won’t be nearly as bothered if it actually happens.
Also, if you’re investing on a long enough time horizon (longer the better), the intra-day noise is meaningless.
Strictly define your goal when you invest. When I invest in sealed trading cards, it’s on a 10+ year time horizon. Why would I care about what happens today?
Learn and Look Forward
The only things you can do after the market goes in a direction that you don’t like is:
Identify your mistake
Learn from it
Reset your expectations
Only play with capital you can afford to lose
Average down (if you still believe in the asset)
Stop watching the price
Sure, you can sell at a loss. However, most people who do this regret doing it. That’s up to the individual at the end of the day.
As much as we all would love to go back in time and approach things differently, that’s just not possible.
All we can do is change how we approach situations in the future.
Finally, understand that it is okay to make mistakes. It’s the best way to learn.
The greatest risk of all, is never taking any risk.
You just have to find risk that won’t make you sick if it goes the other direction.
The best investors are those who are great robot impersonators.
I’m not kidding.
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