First, you might be asking yourself, “What does volatility mean?”
This is what it says on the Investopedia website: “Volatility is a statistical measure of the dispersion of returns for a given security or market index.”
Um…what?! Clear as mud, right? And we wonder why more people aren’t actively involved in markets (any market). It’s likely because these so-called professionals don’t use plain language and it’s hecka confusing. Yeah, I said it, and yes, I’m digressing.
Volatility in the cryptocurrency and stock markets is a given, especially lately. Maybe a little more so on the crypto side.
The crypto market isn’t for the faint of heart. Unfortunately, each of us probably knows of at least one person who has “lost” money in the crypto market because they couldn’t handle one of the downturns and sold low instead of HODLing.
Now, I’m no market genius – crypto or otherwise – and this is certainly not financial advice – but why would you sell knowing you will take a loss when history tell us (for both the crypto and stock markets) that more than likely things will get better and in MOST cases, your crypto of choice or stock will go back up?
There are of course exceptions to this rule, but if you live by the 80/20 rule, then it holds up.
What is really concerning is how some people deal with this volatility and the subsequent “loss” of their investments. And this isn’t just the noobs, this includes people who are experienced in the markets.
In an effort to help others deal with the volatility that is happening now—and will likely happen again—here are some tips for when volatility strikes:
- Don’t abandon your plan.
- Stay invested.
- Stay diversified.
- Take an active approach to risk management.
- Talk to your financial professional (if you have one).
- Focus on long-term results.
- Don’t let your emotions rule your decision making.
- Examine your personal tolerance for risk.
- Learn about economic cycles.
- Expect and accept volatility (especially in cryptocurrency).
- Keep contributing. (Buy the Dip!)
And this last tip is from yours truly. If you’re feeling like you might harm yourself or find yourself in a deep depression, please seek help. Seek help from your crypto community (we are a kind bunch in general) and/or from a mental health professional. Truly and sincerely, please don’t suffer alone. There are people who can help you through this time. And it can seem very overwhelming.
For some of us, like me, I choose to take a different approach. While not for everyone – and certainly not for people who are close to retirement – I choose not to pay super close attention to the markets on a daily basis.
Do I know when Bitcoin has taken a dive? Of course, I do, I don’t live under a rock.
Do I know when the stock market is crashing? Same, yes. But I do run and check on my 401K? No. God, no. That would be far too depressing. I make it a point to only check that once per quarter.
Now, when it comes to our cryptos, I leave that up to Mr. Bitcoin Ben. He handles that part of our finances. (Hey, I have enough to do.)
But for those of you who know Bitcoin Ben, you know he’s a HODLer. So, we keep HODLing. We KNOW that cryptos will go back up. Just like we know that when it goes back up, it will go back down again, too.
Here’s a little something to get you through the volatility–featuring songs from my favorite band.
Sometimes you may feel like, “I Don’t Want to Know.” And “That’s Alright.”
In these times, you could say, “Oh Well.” Or maybe you can’t handle it and you’re, “Never Going Back Again.”
It’s really “Not that Funny.” And much of this is “Over My Head.” Just don’t tell yourself “Little Lies” and know it’s okay to “Go Your Own Way.”
Are we “Hypnotized” by crypto? Sure. It’s a “Big Love.”
1 – https://www.franklintempleton.com/investor/tools-and-resources/investor-education/market-volatility-resources/five-strategies-to-help-deal-with-market-volatility
2 – https://www.usbank.com/financialiq/invest-your-money/investment-strategies/four-strategies-for-coping-with-market-volatility.html
3 – https://cointelegraph.com/news/crypto-bounce-sees-waves-internet-computer-gain-80-110-on-rebound
4 – https://www.cnbc.com/2021/05/19/crypto-and-market-volatility-got-you-rattled-these-stocks-are-a-smooth-ride.html
5 – https://www.fool.com/retirement/2021/05/17/how-to-make-sure-stock-market-volatility-doesnt-ta/
6 – https://www.investing.com/analysis/how-to-stay-ahead-of-this-market-volatility-200581277 (Good quote: ” Trade proactively, not reactively and you will come to enjoy this volatility, not fear it.”)
7 – https://www.investopedia.com/terms/v/volatility.asp (Good quote: “Volatile assets are often considered riskier than less volatile assets because the price is expected to be less predictable.)
8 – https://www.thebalance.com/volatility-definition-and-types-3305968
Kelly Wisness-Semchee has been Bitcoin Ben’s wife for more than 11 years. She has spent 20+ years in marketing and communications for various companies, including 13 years in healthcare specifically. She holds a bachelor’s degree in Public Relations and an MBA. Kelly resides with “Bitcoin” Ben, their fur babies “Litecoin” Little and Lacie, and daughter Alexa in the St. Louis area. Learn more at https://www.linkedin.com/in/kwisness/.
Copyright © 2021 by Kelly Wisness-Semchee