One of the biggest questions that comes up in cryptocurrency or any market for that matter is
Do I hodl or sell?
Especially during an uncertain market where it seems volatility is crazy and there is no way of knowing what is to come.
This is a great time to be reminded of a few principles that we really need to make sure we follow.
1. Do Your Research and Only Choose Good Companies
In the cryptocurrency market, especially with ICOs, it seems anyone can raise between $10-30 million without really putting in any effort at all.
Which is a problem...
Actually, a huge problem because it makes it seem like most companies are legitimate.
Instead, we need to keep our eye on the ball when it comes to investing and follow a few principles:
- Invest in the top 5 major coins
- These coins will typically have less volatility, they may not increase as much, but they keep stable rates
- Do research on the companies you choose
- 90% of your time should go into the research behind these companies (granted that's why we created our monthly premium newsletter.)
- This is the principle Charlie Munger and Warren Buffet follow
- Make sure the market for the product is big enough
- With something like a beverage or healthcare, it applies to everyone, while a cat sweater crypto coin doesn't
2. Only Invest What You Are Willing To Lose
Once you put the money into cryptocurrency, imagine that it is gone.While, we as investors hate thinking like this because we want to be on Blockfolio every ten minutes checking to see if we made marginal gains, this is important.
Otherwise, we end up going crazy.
For us at GCA this isn't about acquiring more and more cryptocurrency, it is about unbanking ourselves and accumulating wealth via an exit to the current economic system.
So once the money is in, it is gone.
By doing this, you'll be less tempted to sell during the lows and buy during the highs, because your emotional investment is drastically decreased.
Trading with emotions isn't logical when you are trading based on math.
Cut out the emotions, consider the money gone and watch it raise over time.
3. Do You HODL or Sell?
Here's the thing.
Many different "gurus" or strategists want to tell you when to buy and when to trade.
They will say that they made X amount off of this trade and are making a ton on their day-to-day, or they will tell you to hold on for dear life.
Now it's quite a predicament and one that causes FOMO and FUD the whole way.
On the other hand, it should always be a person to person basis, because otherwise you are playing by someone else's rule book which can end up losing you money.
Make sure of a few different variables before deciding:
- Do you need the money in the short term?
- Are you doing this for a couple hundred dollars or for long-term wealth and financial freedom?
- What gives you the best peace of mind?
There are also tools to help you. For instance Etheruem in the long-term may prove to be one of the highest priced and most useful cryptocurrencies there is, you can store it until 2020 on HODLEthereum.com
All in all, relax and keep cryptoing.
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Share and comment your strategies below,
The GCA Team