The essence of investment, make friends with the cycle

Sometimes I will list some of the digital currencies I have invested in in the article, although my purpose is not to let everyone buy those coins after reading the article, because I have no idea whether some of them have potential in the future. I am too convinced, but I tried to buy it as an experiment. Even though I am optimistic about some coins, their prices are very high when I write the article, so they are not necessarily suitable for buying, but some readers will still leave a message to consult Is the coin I bought worth buying now?

This is actually a very common mentality of investors: Sometimes when I see other people investing in some good currencies, but at this time the price is high again, it becomes a very tangled thing to buy or not. The reason for the tangled is still fear. Step into the air.

I used to have this kind of mentality myself, but after realizing the role of cycles, this mentality gradually disappeared.

In investment, everyone will praise "compound interest", and there is also a saying that "compound interest is the eighth miracle". This is to emphasize the magical role of compound interest in investment. However, for ordinary investors, it is not easy to maintain a relatively high rate of return on investment products every year and to invest with interest.

But in fact, there is another good friend in investment, and that is the cycle.

The trend of any investment product will not be achieved overnight no matter whether it is up or down in the long run, but it will advance in a wave-like manner. The so-called wave seems to have both troughs and peaks within a certain period of time.

This law has not changed since ancient times. If every investor can make good use of the cycle, buy when it is close to the trough and sell when it is close to the peak, it will be able to obtain quite good returns in investment.

After acknowledging this rule, we don’t need to be too entangled when we come across some good projects with high prices. We can wait until the bull market is over and the upcoming bear market is about to fall to a suitable price.

Everyone's energy and funds are limited, it is impossible to find all the good projects at the first time, and it is impossible to buy the varieties we are optimistic about at the best price, so we want to buy the varieties we are optimistic about again, My solution is to wait for the bear market.

Take this round of bull market as an example. There are many high-quality projects. When we find out, the prices are already relatively high, or some good projects are missed due to limited funds.My idea is to wait until this round of bull market is approaching its climax, and then reflect on the gains and losses of this round of investment in the bear market, replace some bad varieties, and select some good varieties in stages in the next bear market. layout.

There is a saying in the investment circle: We must embrace the bubble, and the bubble is a good time for investors to obtain wealth. I agree with this statement to some extent, but it is also very misleading. Its misleading lies in that it only talks about the benefits of bubbles but does not say the time to embrace bubbles.

If we embrace the bubble when it is at its maximum or close to its maximum, it will not only make no money but disaster. So it’s okay to embrace the bubble, but we have to embrace the signs of the bubble before it blows up.

Specific to digital currency investment, it is to choose projects that you are optimistic about in a bear market, lay out at a low position, and wait until the bull market comes, and the bubble is getting bigger and bigger and is about to burst. This is actually taking advantage of the cycle, and I think this is the way most ordinary investors embrace bubbles.