So another finance piece today. There is a massive story that broke recently pertaining to FTX exchange collapse. Let me get this out of the way now, I am not a crypto expert. You should take any advice/opinion you see online with a grain of salt and always do your own research. The FTX collapse is tied directly to Crypto currency values. Many people have lost a lot of money and for them I offer my deepest condolences. I know what it’s like to lose money on investments, it sucks.
So for me I never invested in crypto. Why? Because I am not educated in that market. It really is that simple folks and YOU should apply this simple philosophy to anything you chose to invest in. You have to be educated on the investment type. Now a caveat here, you can invest in things you are unfamiliar with if (big if) you are not risking a major portion of your portfolio (5% or less).
I simply don’t know crypto currencies. Further they, for the most part, are not regulated in any manner so the risk is much higher. So is the reward of course. Like most things in life the higher the risk the greater the reward. For me I use a long term conservative approach to investing. I invest in things I know, like Microsoft, Toyota, McDonalds. You see companies like that, whether you like them or not have long term established business models.
I always felt more comfortable investing in companies who produced a tangible product that I actually used. See for me, the best advice I ever got for investing was “Take note of the products you buy and use and invest in those companies”. It made sense to me, if I am buying the product its likely other people are as well. That establishes a revenue stream that equates to value.
So those simple principals enable me to avoid the current decline in crypto currency. It also means I missed any and all gains by crypto as well. It’s a double edged sword. Meantime I keep the long term boring process of investing in companies that produce goods and services with a long term track record. Coca Cola, Intel, Google, Apple we can go on and on. The point here is I know these products, I use them and by slowly and steadily investing into stocks and mutual funds that hold these stocks I’ve created a nice portfolio.
Maybe you know crypto, maybe you know oil or real estate? There isn’t a perfect formula here, but investing in what you know is often the best you can do. Sure you might miss a trend and not get in on those huge returns, I get it that sucks. By long term steady investing into companies and products you are educated on is a great way to ensure liquidity and viability of your investment portfolio.
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