Stocks, bonds, real estate, mutual funds, and bank products are some of the oldest and most common forms of investment. Another fast-trending form of investment that has come into play is digital currencies, commonly known as cryptocurrencies.
So, is trading and investing in digital currencies a new thing? The answer depends on who you are asking. Cryptocurrencies, particularly Bitcoin, have been around for over 12 years. The older, the millennial, and even younger investors continue to embrace. Despite its growing popularity, cryptocurrency has been associated with the most pervasive myths. For example, some people associate it with illicit activities; others consider it a scam, valueless, insecure, a hoax, or a fad.
These myths should not deter the existing and the beginner investors. The sure way to demystify these baseless allegations is to prove the contrary by adopting the mindset of a smartvestor when dealing with crypto.
Who is a Smartvestor?
A smartvestor is not someone who invests millions and gets more returns overnight. A smartvestor is anyone who starts out with a positive mindset, considers the available resources and deploys them as a consistent investment.
What makes an investor smart or successful is not an aversion to risks but the right approach to risk management, which also stems from your overall perspective regarding investments.
So, what does this mindset entail?
- Proper Planning
A smartvestor does not invest blindly simply because there is a wave moving in a particular direction. This is a person who strategizes their investment by critical evaluation of their financial situation. Therefore, a smartvestor knows from the get-go how much to invest and for how long. They also set achievable financial goals that can be met on a long-term or short-term basis.
- Consistent Investment
Consistent investment is the drive that keeps a smartvestor moving. They understand that sporadic investment is not enough. Considering the volatile nature of cryptocurrency, it is important to focus on growing your investment. Here, one may consider regularly investing a certain amount of money, for example, monthly or quarterly. However, to remain truthful to such a stipulation and meet the financial goals, an investor must maintain the highest level of financial discipline.
- Portfolio Diversification
As of March 2022, there are 18,465 cryptocurrencies in existence. These cryptocurrencies perform differently in terms of market and volatility. Some are riskier than others. Smartvestors always consider diversifying their portfolios to be able to deal with risk management and prevent massive financial losses in case of a volatile market.
- Compounding
Smartvestors think of their time as a fundamental asset usable for financial gains. The investor’s primary goal is to build wealth, and they understand that this neither happens in a blink of an eye nor comes on a silver platter. For them, it is never enough to invest, earn returns and spend the money. Smartvestors, unlike casual traders, reinvest the interest accumulated, which helps build a robust financial portfolio.
- Risk Management
Risk is an inescapable facet of investment. Smartvestors make peace with themselves by measuring how much risk they are willing to take. Usually, a smartvestor keeps in mind their risk tolerance level when setting their financial goals. They consider the questions such as, “can I rise again if I lose all of my investment or a part of it?” Acquainting oneself with the financial losses one can tolerate is significant in securing the financial future.
- Critical Thinking
Smartvestors do not fall for hypes and are on the lookout for scams. Fraudsters are hovering everywhere, trying to take advantage of digital investors. It is unfortunate that amateur investors have been scammed. A smartvestor takes time to think about some lucrative “investing opportunities.”
Scammers usually use very enticing pitches to woo unsuspecting investors. A smartvestor thinks critically before making a decision. This has saved many investors from losing their hard-earned money to scammers.
The Bottom Line
Investment is a journey that requires resilience, experience, and intelligence. Although this journey may involve lots of risks, it is worth taking them for a secure financial future. All it requires is the possession of the right mindset and, most definitely, working with a reliable, safe and friendly crypto exchange platform like Your Friendly Crypto Exchange for the best results.
If you’re ready to start smartvesting, join IXFI and discover how simple and rewarding trading cryptocurrencies can be.
Disclaimer: The content of this article is not investment advice and does not constitute an offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial and fiscal circumstances.
Although the material contained in this article was prepared based on information from public and private sources that IXFI believes to be reliable, no representation, warranty or undertaking, stated or implied, is given as to the accuracy of the information contained herein, and IXFI expressly disclaims any liability for the accuracy and completeness of the information contained in this article.
Investment involves risk; any ideas or strategies discussed herein should therefore not be undertaken by any individual without prior consultation with a financial professional for the purpose of assessing whether the ideas or strategies that are discussed are suitable to you based on your own personal financial and fiscal objectives, needs and risk tolerance. IXFI expressly disclaims any liability or loss incurred by any person who acts on the information, ideas or strategies discussed herein.
