FORWARD: This post was initially written in November of 2017 but I am now uploading it to the Steem blockchain via @engrave on ChrisRice.blog. My main website is now ChrisRice.xyz.
All of us on @steemit have different investment backgrounds.
I personally started investing in my late teens at 18 years old. I started by investing in the stock market first and later invested in real estate, but I made mistakes. I made mistakes when I invested in stocks (late teens), and I made mistakes when I invested in real estate (mid 20's to Present).
Here are some of the mistakes I made since 2003 that you might want to avoid:
A. GOING 'ALL-IN'
Contrary to what many believe in the crypto-currency space, it is not advisable to go All-in, in any particular investment, or even in an investment class.
Going All-in at any moment in time will prevent you from being able to average down if prices in that particular investment fall, and it can also place a burden on you mentally and emotionally.
When a person's entire net-worth, or even anything close to it is tied to a single investment, the price swings create stress to such an extent that it becomes difficult to think about anything else, and a 10% to 50% loss can seriously harm a person, mentally, and emotionally.
In order to prevent this, I am only investing a minimal amount in Steem. It is still a good amount based on my income and savings but it isn't enough to make me feel or go crazy over a paper loss, even if the loss reaches 75% to 95%.
B. GOING ALL-IN, ALL AT ONCE
This is another mistake I made in my late teens and I think a lot of amateurs and inexperienced investors (or speculators) make this mistake.
When you go All-in, All at Once, or even invest everything you are willing to invest all at once, you remove the ability to average down and buy lower if prices fall. This is especially true when you are investing in a stock or cypto-crytocurrency that is possibly bottoming out (i.e. Bitcoin) but it could go lower.
One of the reasons why a 50% to 95% paper loss in Steem wouldn't affect me much is that I believe in the technology and I can continue to purchase a set amount AFTER prices fall 50% to 95%. I'm not saying that will happen but no one knows what will happen. I still have the temptation to invest more, and all at once, but @emafe actually helps me with this since she is more risk-averse than I am. Sometimes having a financial adviser, or even a spouse to run ideas through can prevent us from falling into the hype that traders call FOMO (a.k.a. Fear of Missing Out).
UPDATE: October 1st, 2019
It is almost a year later and my paper loss in Steem is over 50%. My current average price per Steem is about $0.30 USD and the current price of Steem is less than $0.14 USD. Thanks to my mentality of not going all-in when I initially wrote this article in November of 2018, I still have money to buy more Steem and average down at current prices 😊
C. UNDER-ESTIMATING THE MAINTENANCE REQUIREMENT
This mistake applies to the real estate I invested in while living in the Philippines. Real estate is different than stocks, since it requires maintenance - air conditioners, roofing and in the case of houses in the Philippines, even walls can break or crack and deteriorate.
I under-estimated the maintenance required for real estate and since I am poor at maintenance, I suffered the consequences.
In order to avoid maintenance, I have now chosen to avoid investments that require maintenance, excluding their tax requirements. Tax requirements is the one thing that we cannot avoid but aside from that, investing in Steem doesn't require maintenance. I hope @emafe will remind me to avoid real estate since I love real estate but I lack the ability to maintain houses and/or condominiums.
Those are the Top 3 Investment Mistakes I made in the past, and I want to rectify those mistakes in the Present. If you have any other mistakes that you think should be listed here, comment below, and let me know if you agree with me or not.
DISCLAIMER: This is not intended as professional or financial advice of any kind. It is only my personal perspective. Do your own research and remain aware of the fact that it is easier to lose money than in is to make money when investing.
This article was posted by @chrisrice on Steemit in November of 2018.
Best of luck to you!
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