Bear Market: Making the Most Out of the Least
Learn How to Protect and Increase Your Investment When the Markets Are Moving Away
Just like we breathe in and breathe out, financial markets also have a natural pace of going both up and down. Volatility is an innate characteristic of any financial asset and while some are more dynamic than others, no market or index has ever gone up indefinitely. Add political turmoil, increased interest rates and inflation into the mix, and we have a rocking boat navigating rough seas indeed. How we go through the storm is key to our investment and development as investors. We must learn to protect and increase our wealth through good and bad days alike.
Understanding Risk and Bear Markets
Risk is not being mitigated by avoiding it. Simply because this is an impossible thing to do. Everything we do has a certain amount of risk associated with it – whether it is flying a plane or investing in the crypto or stock markets. If we can not eliminate risk, then we must learn to understand it. By learning and educating ourselves, we become skilful in managing our investment regardless of how the markets are behaving. By going through current bear market, we become more experienced in recognizing the patterns and taking advantage.
But it took decades for some successful investors to understand all this. It might sound easy on paper, but while in dire straits, it becomes increasingly harder to see clearly, let alone act. In order to better understand how and when to invest, we must approach the markets with wider optics. Yes, there is volatility and markets have been going down for a while now. But this is exactly what experienced investors are waiting for. They are waiting to buy at a price that benefits them. They are waiting for “selling season” and we’re in full swing right now.
People have been flocking to Bitcoin and stocks because they’ve been going strong for a long time – buying at high prices and thinking they will go up indefinitely. But they don’t. Just like it doesn’t go down for ever.
Make Money Work For You
Inflation is squeezing people’s budgets in a way not seen in the past 40 years. Investing time to make money can only be that much more of a fruitful endeavor. Investing money to make money will allow you to scale your investment exponentially, not only in a linear way – from paycheck to paycheck.
If you are only now starting your investment journey, or even if you already have a couple of years of experience, chances are you don’t fully understand bear markets. This is giving you even less chance to act and take advantage of the situation. We are going through a bear market right now. While we understand the implications, ask yourself this: where do you want to be when the markets will be up again? Still watching from the sidelines, considering buying at a much higher price than now? Or perhaps already taking profits as you’ve been smart enough to buy when the markets were down?
Inspiration & Resilience
As the whole world was still picking itself up after the 2008 economic collapse, companies like WhatsApp and Uber were just getting started. The financial landscape was looking bleak and money was short for both household consumers and the corporate world as well. Yet some investors and companies seized the opportunity and filled a void nobody was aware of.
People got scared when the pandemic started in 2020 and it was not looking pretty. Yet some months later, both crypto and stocks rebounded in full force. Crypto in particular showcased a substantial bull market, reaching all time highs amid the confusion and global disturbance. Did nobody see that coming? Some people did and they were already buckled up for the ride.
We need to zoom out and see the bigger timeline with each occasion. Investing is not only about doing good when things are going great. Being an agile and resilient investor means adapting to changes and finding inspiration in the most challenging times.
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