Emilie Choi, who serves as the COO of Coinbase, once stated that she finds it hard to predict market cycles. She once mentioned that she avoids trying to forecast where we may be in the market cycle since she would most likely get it wrong. This simple statement is quite strong and it’s especially so for any individual involved in investing.
Sourced
I think attempting to time the market is a dangerous game. To make quick money, many investors are looking for low prices when buying and high ones when selling them off. Conversely, even seasoned professionals admit that accurately predicting the movements of markets is almost an impossibility. It’s particularly true within cryptocurrencies’ volatile world; often chasing short-term trends leads to missed opportunities and significant losses.
Instead, I maintain that the actual strategy should be about time in the market. This entails buying and holding investments over long periods. Investments tend to grow and compound over time which can significantly boost their value. This was echoed by legendary investors like John Bogle and Warren Buffett who knew that compound returns are what create wealth.
Therefore, keeping investment allows the interest to grow and creates compounding interest. By and large, financial markets tend to rise with time despite cyclically occurring bearish periods. To avoid these slumps, many people try to run away from them. Instead of stressing yourself out by constantly following the market and making snap decisions.
Additionally, a regimented approach helps one elude emotional traps when investing. Decisions made during market booms or crashes can result in buying high and selling low which is the opposite of what a winning strategy looks like. Remaining invested silently can help withstand the market’s highs and lows.
Investing for a long period seems scary as far as cryptocurrencies are concerned because they are highly volatile. Even though here as well there is time in the market. Therefore short-term volatility should not be an issue if we focus on cryptos that have good fundamentals and bright prospects ahead of them.
Moreover, I discovered that this approach is perfect for a more balanced and sustainable lifestyle. Constantly keeping an eye on the stock market can be wearisome. By using a long-term strategy, other things in my life need attention without me worrying about daily changes in the market. Thus, whether it’s dollar-cost averaging or purchasing when markets are down, consistency pays off with my investments over time.
Emilie Choi’s comment reminded me of the significance of long-term investing. Instead of trying to predict market cycles, I concentrate on remaining invested and allowing time to take its course. This method does not only assist in risk management but also allows me to enjoy compound returns benefits. It is a technique that ensures calmness and even growth despite the unpredictable nature of cryptocurrencies all over the globe.
Posted Using InLeo Alpha