5 Lessons I learned from the Recent Market Crash

lessons in market crash

Stock Market, Crypto Market and NFT Market cannot escape the recent market crash. If you were caught unawared, there’s lots of short and long term investors on the same shoe. One may argue that the market is prime for a major correction, but really there are many compounding factors that trigger this volatile downfall. Russia and Ukraine war, interest rate increase, inflation concerns and many others just bring and reach its boiling point.

How you react can be categorized in three major moves: buy, hold or sell. This can be broken down to: buying the dip, holding and waiting for recovery, and selling at a profit and/or loss, the latter being the case for majority of investors. However you reacted, there are lessons to be learned here, especially if your action is motivated by panic.

  1. Holding Blue Chip Companies is always a good leverage

Blue Chips are more likely to survive and bounce back than new and unproven companies, so always allot some blue chips on your portfolio. Holding them would also give you a peace of mind especially if you are a new investor.

2. This may be the right time to buy favorite companies on a discount.

Buying the dip may just give you an entry point to your favorite companies. If you have money to invest and you believe on the companies, this may be your golden opportunity to grab a share or token of your well-sought-for companies.

3. Stop Loss your stock, crypto and nft price so you know when to strategically exit.

Being methodical on your trading and investing by setting a stop price loss separates an amateur to a professional. Play with your money the right way by avoiding huge losses, so track down your trades and investments and set a certain price you are comfortable losing.

4. First lesson of money management is to pay yourself first before you invest.

Debts, loans and credits are the main stressors of your financial life. If you got this sorted and you are only spending extra monies on your trades and investments, then you are doing well to learn about and manage your money.

5. If you can’t handle a loss, then re-think your investment and trade risks.

Do you not sleep at night knowing you are losing a lot of money because of your aggressive investments and trades? Maybe high risk high return is not the right strategy for you? If your investment horizon is long, you have to know that you have a longer timeframe for the market to adjust and reach its peak, so instill this long term mentality for better and rewarding results.

Thanks for reading.

Jay

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