Investment Lessons to Learn from the Current Market

Right now, everyone wants to know what the future holds for certain assets, especially if you’re an investor. Today though, we won’t be doing that. There are some lessons to learn from the way the market has moved from the lockdown right to this moment and you may miss this if you haven’t been paying attention.

For example, March, when the worldwide lockdown began, was the most volatile period in the stock market. Many stocks fell, along with bonds, but tech stocks did so well, even though now no one is as enthusiastic about them.

Some of the stocks that fell also went up five times but has crashed again this period. Both the bond and stock market are currently bearish. Real estate boomed too and crypto seemed invincible.

What can we learn from this journey?

Financial Advice is too Important to Take From Just Anyone

Financial advise is important and it’s dangerous to get them from just anyone.

Billionaires, influencers and celebrities may not be the best people to take financial advice from, because it might not be in your best interest.

These people have sometimes pushed the weirdest things, from meme stock to meme coins to some weird crypto coins that are almost non-existent today.

Don’t take advise from them just because they have a name, they may be trying to rob you. Listen instead to verified financial advisers and do your personal homework before enforcing an advice that you got.

 Speculation Will Always Remain

Speculation remains all the time, and there will always be greed and FOMO to continually fuel it.

People will continue to speculate about a financial asset and a bubble gets formed.

Of course in our time it doesn’t look that way because there’s social media to validate our thoughts and feelings, but it’s the same cycle, just on a larger scale.

We may be tempted to think things are new and one asset may change the future, but there’s nothing new in the market and bull markets eventually end.

Investing is Tough

It’s not easy to appear like nothing is happening for you when all around you, people seem to be making quick money. Of course it was easier to invest in 2020, but certainly not now.

It’s definitely not easy to see money you had to let go of fall by 30% in just a few months, to experience high inflation and the possibility of an recession.

Of course it would be easier if there was a way for you to keep your money in an asset that maybe does 7% returns with no fluctuations. Unfortunately, this can only be a dream.

 Sometimes you’ll have to endure the loss and stand your ground without panic selling.

Investing means making peace with uncertainty and difficulty.

A Successful Investment Strategy Needs to Survive Down Times

Speculative habits will affect your investment habits and should be avoided.

You could pick stocks in a bull market and then it turns out to be a tornado during a downturn hits.

Speculation only works when the market is bullish – a more effective investment strategy will involve durability, common sense and balance or else, it won’t survive in the long-term.

Which of these lessons resonate with you the most?

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