What happened with LUNA/FTX and everything in between was too much. I don't think markets are going to recover from all that shit this year. Not being negative, just practical. I know it's painful and we gotta do something about it. While most people are panicking or getting bored, it's a great opportunity for those who are here for the big play. 2023 is going to be the year to prepare for 2024 & beyond.
Here are some of the things I am planning to do and hopefully you will get some clarity on what needs to be done in your case:
Staying Engaged
Great projects emerge in bear markets. If you disengage yourself just because you lost money or crypto markets are not as fancy as they were a year ago, you are missing out. That doesn't mean you start FOMOing. Just keep yourself updated with the latest happenings in Crypto and Web3 in general. Learn a new skill that could support you by the time bull comes. As the new year has started, I am slowly catching up on everything. This is the time to build and move forward.
Rebalancing In Stages
Rebalancing is a tool to keep your portfolio in line with your goals. While it's not a strategy for making money, rebalancing can help you stay on track as the market shifts. If you're investing for growth, consider using automatic rebalancing to keep your portfolio at a desired risk level even if that means selling some winners and buying some more of the losers. I am betting high on my long-term plays by DCAing into them. For example, I am buying Hive & BTC every day. And building more passive income assets.
Reassessing Risk Tolerance
If you’re going to reassess your risk tolerance, it’s important to know what that means. Risk tolerance is the degree of uncertainty or variability in returns that an investor can withstand without changing their investment portfolio. Put differently, it’s how much risk you can take on before you become scared and run for the hills or at least think about running for the hills. 😂
The best way to determine your own risk tolerance is by answering some questions about yourself and your financial goals. I
- How often do you check your portfolio for a particular investment?
- Do unexpected events make you anxious?
- What was the last time something like this happened to you and how did it affect your day-to-day life?
These seem like pertinent questions for someone like me who wants to invest money safely but profitably.
Focusing On The Long Term
The most important thing anyone can do when the market is down is to stay focused on their long-term goals. I am going to do the same. Won't let short-term fluctuations in the market deter you from my plans.
Sometimes, these dips are just like spring showers – they make life better after they pass through. This may sound like a cliché but it's true! If an investment goes down by 10%, then rebounds back up because of positive developments in that company or its industry, don't be upset because you sold or bought at the wrong time.
Reviewing Investment Plan & Sticking To It
I had an investment plan that keeps on changing depending on the markets but the major goal stays the same. Without making any major changes to my plan, strategy, time horizon, or risk tolerance, I am going to proceed with what I have decided to achieve in the next 5 years.
In a bear market, investors are often tempted to make portfolio changes in an effort to improve performance (and perhaps get lucky). The problem with this approach is that you can't predict short-term market movements. The best you can hope for by making portfolio changes during a bear market is giving yourself more exposure to risk than before - which isn't necessarily a good thing if you're already taking on too much risk. 🤨
Instead of focusing on improving performance through portfolio changes, I am going to focus on keeping costs low. Lower expenses will improve long-term results regardless of what happens in any given year or quarter.
Conclusion
Bear markets can be scary, but they shouldn't be. If you're losing sleep over your investments and worried that the market will never recover, then it's time for some perspective. Remember that today's falling market is an opportunity to buy low and have a profitable tomorrow. Investing is not a sprint, it is a marathon and I am in it for the long haul. What about you? Comment below!
Posted Using LeoFinance Beta
