Do Not Panic
A few of my clients have been asking about how should one be dealing with their trades during a Bear Market?
A bear market is simply a period in time where stock market prices are falling.
A bear market is a time when most investors panic and run for dear lives.
A drop in investor confidence will signal the onset of a bear market.
But remember, Bear markets aren’t for panicking.
At its core, a bear market is fueled by pessimistic investor sentiment. While there tends to be some kind of economic event, such as falling stock prices, to kick off bear market conditions, the issue is perpetuated by a pessimistic outlook from investors. Because of this pessimism, selling increases and stock prices can plummet. When this happens, trading activity begins to decrease and same with dividend yields. A bear market is not a technical definition as much as it is an expression of a particular market climate. But, there are some general parameters that indicate this market condition. The bear market got its name for the manner by which bears tend to attack their prey: by pounding their paws downward. A bull market, on the other hand, is named for the bull’s tendency to attack in an upward motion with its horns, alluding to the upward tick of the market.
“Recessions are normal, the Market dips because of politics. If you cannot handle what is happening, you are not ready for Crypto trading in particular.” – Zachdev
Hodling is the key.
Remember, even if that number is down, it’s still better than having that money sitting in a savings account with a ridiculous interest rate. Acting out of fear is as good as handing over your money to the investment banks and sophisticated investors.
1) Maintain Your Composure
When bear market conditions first begin to surface, you may start to feel anxious about your investments and your financial future. It’s important that you don’t panic when things start to take a downward turn.
Lots of people make the mistake of pulling out their investments when the market starts to dip. Wall Street goes crazy. But, this will leave you at a loss and prevents you from benefiting when the market starts to climb up again.
2) Practice Crypto Wellness
Research again about the project you have invested in and remind yourself about the purpose of your investment in the first place. Check through how the ongoing politics have affected this project in particular and observe how it has been riding with the price of Bitcoin. One important thing to take note of is that these media platforms, Youtube, Twitter and Reddit will help your through this Crypto Wellness process.
3) Think About The Long Term
Think about what the long-term outcomes will be if you choose to ride out the bear market rather than pulling out your investments when things start to dip. Think of the crash of 2008. The people who lost their shirts are primarily those who sold at the bottom of the market. Those who held on, however, are now experiencing brand new highs. Be proactive about diversification before the market starts trending downward, and always take advantage of opportunities to add diversified options to your portfolio. This gives you the greatest chance of benefiting from growth across a variety of markets and reduces the chance you will be significantly affected by a declining market.
4) Buying Opportunity
Take advantage of market conditions, using the analysts and findings through the practice of Crypto Wellness. Always remember that with so many large companies taking a hit during a bear market, coins are more than likely to spring right back up when market conditions improve. These investments can really pay off, but you should still approach buying with caution during a bear market. As a general rule for all your investment endeavors, you should never put more into the market than you are willing to lose.
5) Review Your Risk Tolerance
There are plenty of direct-investment options for getting in on the crypto game, but they’re not the only game in town. Investing in the growing, comprehensive blockchain market could potentially have much more promise than just pure-play crypto. In fact, the digital finance ecosystem is growing exponentially – including assets like Non-Fungible Tokens (NFTs), digital securities, Central Bank Digital Currencies and, of course, Decentralized Finance and the Metaverse Tokens.
Final thoughts, in the end, there is no lack of investment opportunities in the digital finance world. From investing directly in cryptocurrencies, to investing in the comprehensive blockchain ecosystem, individual investors can easily find the right methods that fit their individual needs. Assess how much risk is manageable for you and start doing your own research before taking any actions.