So you've been watching the Bitcoin "bubble" since the late part of 2017. Maybe someone pointed it out to you when Bitcoin was only $6000. You shrugged it off and then watched it go to 10k, 12k, and up. You start to kick yourself for missing out on a such an easy money maker and scramble to find a way to get in.
You spend hours reading and learning the quickest way to get in on this. Each day that passes you can see yourself losing thousands of dollars of potential profit. You finally get in at 17k and watch as your new investment shoots to 20k. You feel on top of the world and brag to all your friends that this is the easiest money you have made. You know it can only go up and so you hold.
That Euphoric feeling turns to concern as the price drops to 18k.
"I'm still up, it will turn around."
In the days to follow it falls to 15k.
"If I sell now it is going to shoot up and I'll miss it."
13k
"I'm getting out, I'm going to lose all of my money."
You sit back and watch it drop to 9500, feeling a little better about not losing more. It creeps up and you jump in to get back at the bottom. You buy at 11500 and it goes to nearly 13k.
"I'm gonna make back that lost money."
A week later it is back at 9k and you are dumbfounded.
"How could I do this again... I've just lost more money than I make in a month and will never get it back."
Nearly Seven Thousand Dollars gone from emotional investing.
If this sounds familiar it is because this is how the majority of the market functions when there are huge moves in the market. To be successful you need to take emotion out of the equation and stick to a plan.
In the next post I'll talk about diversifying your portfolio and setting up passive streams of investing.