The key to effective investing is setting realistic expectations and using a clear framework as a guide. Investing in cryptocurrencies requires structured decision making.
At any time, Bull or Bear Markets, you can always make investments that double, multiply or simply serve as a refuge so that our assets do not lose value or, at least, lose little. There are no guarantees, but with order, the possibilities of sustaining and gaining value grow.
In the world of investments “there is no security” but there are ways to overcome the storms that the real world proposes.
Meanwhile, the fundamental key will be in understanding and trusting that through order it is possible to find again and again what some simply attribute to fortune.
Structured Decision Making
The biggest challenge of investing in cryptocurrency projects is the large number of existing coins, more new coins, and a myriad of protocols that could justify investing your money. Valuable is usually buried under a mountain of worthless data. For all this, it is logical to ask the first question: How to overcome this enormous obstacle?
There are two general approaches to separating signal from noise: (a) Do your own research; (b) Trust the research of others
Do your own research (DYOR or do your own research) is a fundamental mantra of the cryptocurrency universe and, in addition, the only genuine way to justify the risk of the money that we have so hard to earn.
Although most people can agree, in fact very few know where to start. Acquiring knowledge is not just an arduous task, requiring endless hours of reading and listening, but a moving goal, with new technologies and concepts, constantly emerging and being challenged.
The tempting alternative is to outsource this entire DYOR issue to “those who know”, to those who explain better on social networks or know how to sell some ideas better, but – you have to be careful – getting on the shoulders of these great communicators is not risk-free.
According to the Franciscan Thomist William of Ockham, it is not necessary to multiply explanations. It is best to distrust everything and everyone but, fortunately, a compromise can be reached between the unrealistic challenge of retraining as financial expert in your spare time, and taking massive risks on low-quality coins. This depends on three aspects, which are briefly explained below.
1. Set a realistic expectation: It means we can let the airdrop or first public sale go by without being disappointed in ourselves.
2. Focus on the things you understand: One of billionaire investor Warren Buffet’s golden rules is to only invest in things you understand. If the case is: “I don’t understand anything about crypto”, the best recommendation is to start with some very general exercises for adoption. A good example, start with Vijay Boyapati’s “Bull Case for Bitcoin”.
3. Establish a framework for decision making: If you focus on projects that you understand, you can finally filter out the noise, reducing the amount of information that needs to be absorbed. This approach will help to go in the right direction.
The key to effective investing is setting realistic expectations and using a clear framework to guide decision-making in the right way. In a market like cryptocurrencies -little known to many-, it is not easy, but with a little order, the chances of achieving it will undoubtedly increase considerably.
By Audy Castaneda
