Your Life in Perspective (The Introvert's Perspective by Ælfræd)

 

The election had ended. Unfortunately, not all of our chosen candidates gained the needed votes to hold office. Some are at a loss. Some are not. However, some are even in worse shape because their investments are losing too.

 

"watching-stocks-on-mobile-phone" by Olya Kobruseva is licensed under CC0

 

 

If you haven't heard the news, the stock and crypto markets are at a frenzy and bottoming. The big whales who are backed by seasoned traders and algorithms are able to get out.

 

However, the retail investors like you and I were not so lucky.

 

We know that some losses are uncontrollable, like a loss of a loved one. You need to accept it regardless of how hard it is.

 

But when it comes to investments, you do have some degree of control over it. It is through Risk Management.

 

Read Article: Master the Art of Risk Management in the Stock Market

 

Even if you are ready to weather the storm, sometimes, if not most, market forces will creep their way into your portfolio to suck it dry.

 

Too late for your risk management setup to kick in.

 

If that happens, you will be in limbo with the five stages of grief.

 

 

Denial

 

Even if the world is telling you that the market is bottoming, you still convince yourself that it is just a little dip.

 

It will bounce back.

 

More often than not, your assumption will be wrong. The market is not fond of listening to your feelings.

 

It has its own.

 

 

Anger

 

Now it is clear as day that it is bottoming when your portfolio is at a 50% loss.

 

You will likely find someone to blame. It may be your laggy platform, big whales shaking the boat, or the recent election? (partly true if you are locally invested), and even to yourself.

 

Be accountable.

 

You know for yourself that it is you. And you alone are responsible.

 

 

Bargaining

 

The market bottomed again. Others are securing their life vests while you are still paralyzed with what happened.

 

You convince yourself that if the market rises at least 10%. You will secure your life vest.

 

But before the day ended, the market bottomed again. Your account is now at an 80% loss.

 

 

Depression

 

This is the stage where you don't care anymore.

 

You don't open your portfolio account and at least try to mitigate the problem.

 

You say to yourself, that 80% loss is as good as losing 100%.

 

 

Acceptance

 

This is where you fully accept that you've lost.

 

Your head is now clear of what to do next. Be it salvaging what is left on your account or being more observant of the market signs.

 

This is where you learn your lesson, but with a high tuition fee.

 

However, you are now equip with the knowledge and experience of how to deal with it next time.

 

Your weakness today will be your strength tomorrow.

 

 

Closing Thoughts

 

Dealing with investment losses will not be the same for everyone. This is true if what you are losing is money that is not intended for investments.

 

This is why it is important to allocate disposable money to volatile investments like stocks and crypto. Money, even if incurring a loss, will still let you sleep at night.

 

Managing your risk is the only way to lessen the impact of market losses.

 

Before entering a trade, make sure to have the following:

 

1. Properly researched Stock or Crypto
2. The amount that you are investing per Stock or Crypto
3. The amount that you are willing to lose. For example, 10,000 for every 100,000
4. Knowing when to enter
5. Knowing when to get out

 

In the face of market uncertainty due to national and international forces, make sure that you are protected.

 

Protect your capital by doing risk management, just as you tried protecting your freedom by voting.

 

 

 

What you should do today

 

 

 

 

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