There are lots of investors that have just entered the market and are now questioning their positions. Having entered at an all time high or close to it often leaves new investors in this situation. Most investors have been in a market we just entered and instantly been upside down at some point of our journey. A lot of the time this happens when someone is first getting into investing but it is not limited to that experience. Why does this happen?
When investments are stagnant there is often little or no press and or excitement around those vehicles. This was seen from June to December in the Xrp markets. Those already invested are pretty in tune with what is going on and the outside world is oblivious. When that dynamic changed in December the atmosphere became ripe for many new investors to sit on the precipice of perceived disaster. What situation did this create?
This was a recipe for disaster for new investors because they only became aware of Xrp and it’s utility as an investment once profits were being produced on a grand scale. Instantly the hype around Xrp as an asset was magnified 10x or even 1000x as new investors pile on thinking they have just discovered instant profits and the wave will continue. Very few times in a situation like this will new investors ever time a market correctly . What is the result?
More often then not these new investors learn a quick lesson on the fundamentals of a market. These lessons leave new investors feeling left out and betrayed by the asset they are invested in. Many will take losses and leave the market altogether. More will take losses and then buy back into a position with even fewer shares of what they once held further aggravating their experience. Looking back at the previous two months of the Xrp market and crypto, in general, we have a perfect example of this situation. What can we deduct from this situation?
The first thing these new investors must realize is it is not the fault of what they invested in. They must assume responsibility for what, when, why, and how they invested in said asset.
I will use myself as an example because like I earlier stated we have all been there.
My first investment in Xrp was Monday, 08 February 2016 or so. I bought my first Xrp near an all-time high of 10 cents. Like many, I thought I was going to ride this wave to the bank. I too soon realized what happens when you jump into something you do not fully understand. By Tuesday, 13 December 2016 I had lost nearly 90% of my original investment. What you do next will make or break you and your investment. Do you know how to properly address a situation like this?
Once you are in a market and upside down the best thing you can do is to research your investment in full as quickly as you can. This is the action I took and it immediately gave me a sense of comfort. I soon found I truly believed in Xrp and knew that while I was upside down at the time it would not last forever. The hardest part of said research is wading through the fud and finding the truth. I highly suggest you take everything with a grain of salt and heavily rely on your own research. How can this all be prevented?
There are many ways to prevent this entire situation. The most important is to educate yourself BEFORE you decide to jump in with the masses. Most people will not make money on their investments and if you follow the crowd you are likely to set yourself up for that situation. The best time to buy is historically when everyone is screaming about the blood in the streets. How can one better position themselves in this scenario?
Planning is the single most important thing beyond educating yourself about your investments. Once I educated myself about Xrp I sat down and came up with a plan. What was I to look to for future entries? How would I know those times have come? When and where would I take profits, and never question it as it was my plan? Who would I look to for news? How long would I invest? Would I cost average down? Once I was positive would I continue buying?
These are all things every investor should know before they invest. Not having a plan is the biggest disservice you can give to your investment. So what is the point of all this?
If you really want to be an investor then take the time to do the proper research and come up with a game plan. You will sleep better at night and you will have far more faith in where you have put your money. If you moved into an asset on a whim with the hype and the masses the best way to correct your mistake is to educate yourself about said investment. This will allow you to know if you should cut your losses and run or if you should hold and wait for profit. Knowledge is the ability to hold with confidence, give yourself that and you will stop questioning your past mistakes.
Good luck and invest wisely.
