You wake up one day in the morning, just like any other, and as usual, you look at your cell phone screen to see the prices of your investments.
To your astonishment, the red of one of your holdings is excessive, -45%.
You can’t believe that, literally overnight, the share price has fallen so much, “if last night it only registered a few points of correction! “you say to yourself.
You check other trading platforms, and the price shows the same number.
You don’t get over your surprise, between concern and an incipient anger at yourself for having bought that “damned token” that was recommended to you.
You search among the news, among some references, whom you respect, to see if they give an explanation about the causes. Maybe it is an error in the platforms, or at least, it is a manipulative action of greedy whales, who want to knock down the price to buy cheap, and then everything will go up again.
In your “nervous” search you do not find, neither great clarifications, nor enough. The reason is not clear, maybe it does not even exist. But, of course, that does not reassure you.
You ask in your social networks and groups in which you participate, and the answers you read are, between nonsensical and speculative, without verifiable data.
There is no one to give you a cause that you understand and can corroborate. The red continues, even something “redder”.
You already have to make a decision, that’s the idea rumbling in your head. You can’t afford to lose everything, not even more than the half that is almost here. You question yourself, “Will he raise the price again, how long will it take, what if he doesn’t?”.
A few minutes later, already convinced by your bad decision, you curse yourself.
This scenario is commonplace in the nascent crypto ecosystem, and as volatile as it is promising. Maybe you’ve experienced it, maybe you haven’t, or not as extreme, or you may never even experience it.
But almost, it doesn’t matter relatively, what does matter is, what do you base your investment decision on?.
When you buy a computer, for example, do you only look at its external appearance?, do you only pay attention to the price?, or you find out about its electronic components, you look at the reputation of the brand and the manufacturers of its components.
If you only look at the price and its appearance, you are not valuing its components, its technology and the support of its manufacturers. In the analogy, you are not paying attention to its fundamentals, you are only buying the fashion.
The same thing happens, on another similar plane, with investments. I used the above comparison, which I consider the most pertinent, because when we buy tokens, we are buying technology.
The developers behind blockchain projects are technical in computer design, but they must also include economic and social definitions. Their products (the blockchains and their tokens) are developed on a technological level, it is clear, since a bad design will have bugs (errors), and in some cases fatal, but its economic scheme also has an impact, that is, the monetary policy that supports it. The social component exists, undoubtedly, people are the ones who form the ecosystem.
It is thus evident that a deeper knowledge is necessary for an investment to have a greater chance of success.
If your funds are directed by your research and analysis, no matter the term of your investment, if you maintain your behavior by updating the information, your mornings will not be like the one at the beginning of this article, you will not enter into anguish, because except for a black swan, you should not have this type of unpleasant surprises.
Black swan is an exceptional event, unforeseen because there is no data, or because it is considered irrelevant, but once it occurs, it has an impact of considerable consequences.
Price is circumstantial, and in the medium and long term, price follows value, never the other way around.
INDEX: link to MEDIUM english articles of @liberlion
