I’m quite new in investing and so far I have only dabbled in cryptocurrency and some small savings on digital banks that earn a decent interest compared to traditional banks. I’m also planning to invest on stocks that gives dividends in the coming months/years. With crypto, I only started last February 2021 and I can say that it’s an eye-opening experience for me and I’m here to share with you some of the things that I have learned along the way on how to stay sane while investing in this highly volatile market.
Before we continue, please note that this is not a financial advice and should not be taken as such. I’m just basically sharing my thoughts and experience. If you need a financial advice, please consult a professional financial advisor and also, don’t forget to Do Your Own Research (DYOR).
Anyway, let’s go back to the topic.
A Brief Background on My Investing Journey
I have some small savings on various digital banks that earn me better interest compared to traditional banks (CIMB, KOMO and Diskartech) but my recent investment is with cryptocurrency. I signed up with Binance last February 2021 and I also signed up with other crypto exchanges such as Kucoin, Gate.io and Crypto.com so I can buy crypto that are not in Binance.
In the last few months since I started dabbling in crypto, I find myself looking at the app so many times in a day and just stare at the chart LOL!
I also find myself so distracted that even if I’m doing something else (such as blogging or online selling related stuff), I catch myself losing my focus because I’m always curious to see where my crypto investment is currently at.
The movement in certain days are really challenging to look at. It’s like an emotional roller coaster rider. Sometimes you’re up at XX% and sometimes you’re portfolio is down at XX%.
It’s driving me nuts especially on my third month. The first and second month was easy (fortunately) because it was just going up almost continuously with just some minor corrections along the way.
However, on my third month, I experienced the highest gain and right after that it dropped considerably and have been moving sideways and even dropping a little bit more ever since.
Luckily, I have been taking profits since I started and have been diversifying into yield farming, saving and staking.
How to Stay Sane While Investing
So how do I kept myself sane while investing? Here are some things that I do in order to keep myself sane despite investing in a very volatile market:
I Only Invest What I Can Afford to Lose
When I was reading blogs and other article online, one thing that got stucked in my head is to only invest what you can afford to lose. And I did follow that advise and it really helps greatly minimize my anxiety.
Imagine if you have invested money allocated for very important things to pay such as your kid’s tuition, monthly rent and other bills. Imagine how anxious you will be when the money you have invested is down for around 20 – 50% and you have to take it out because you need to use it. You get the drift.
And also, since I’m from a third world country with a third world income from my online selling gig, I also did not put all my savings into my investment I made sure that I only invested a portion that I’m comfortable with losing (just in case the market tanks).
I Only Invest in Projects that I Believe Have Solid Fundamentals
I did my own research in all of my crypto holdings and I do not depend on whatever someone (an online influencer) will say about a crypto.
I checked the available online profile of the dev and management teams behind the project. I read their existing collaborations and partnerships with other crypto and traditional companies, etc.
It’s very time-consuming to be honest and also mentally draining at first because there are so many terminologies and information that I have never encountered in the past. But at the same time, I’m enjoying learning new things.
This is what actually eats up most of my time in the recent weeks.
Knowing the company that I invest in helps minimize my anxiety about the crypto that I have chosen to invest in.
I Manage my Greed (I Try To LOL!)
I try to manage my greed for as much as I can although to be honest, it’s easier said than done. But having said that, I have taken some small profits along the way but I did not withdraw the money though. But instead, I used the money to invest in other crypto-related stuff such as yield farming, saving and staking.
I know it’s a bit risky but I really wanted to experience various crypto services and products that’s why I reinvested in them.
I would have earned more if I was able to take out some of my holdings when my earning reach a certain level. However, most of them are staked thus I can’t take them out right away. Anyway, it’s another lesson I’ve learned in crypto investing and trading.
And besides, I can only say this now because the market went downhill after that time. But during that time, no one really knows where the market was going.
Consciously Focus on Other Activities
Nowadays, everytime I catch myself thinking about my crypto investment while doing my other day to day activities, I consciously try my best to disengage myself from the thought and re-focus on what I am doing.
Again, this is easier said than done but perhaps, after some time, I’ll be able to manage this more.
Stay Away from My Phone Before I Sleep
Another thing that I do now before I sleep is to put my phone on top of my cabinet instead of what I usually do in the past which is to put it beside my bed.
Because every now and then, I get tempted to look at my phone and check my Binance account. LOL!
Don’t Beat Myself Up
Sometimes, I catch myself beating myself up for not making a better decision. But, since I got aware of this behavior right away, I always remind myself that there’s no use in crying over spilled milk and I just nee to focus on learning from my mistakes.
Stick to the Game Plan
I’ve change my game plan from pushing the profit to it’s maximum potential to being more conservative. If in the past, I only take profit when a coin rallies at a certain %, I’ve lowered that target so I can take profit more frequently.
I also keep myself updated with all the news about the crypto that I’m holding to ensure that I can react quickly when things don’t go as plan.
I can’t imagine what big time traders and investors go through on a daily basis especially those who are trading and investing millions of dollars. It must be really gut-wrenching.
How about you? How do you keep yourself sane while investing in volatile markets such as crypto and stocks?