It’s OK to be not OK
24th October 2022 |
Quite often we talk a lot about the psychology of investing.
The ability to get your mind under control to act in a rational, predictable way is no easy task. It’s not easy when markets are booming, and it’s not easy when markets are cratering.
We talk about almost being robotic in your investing and trading actions to mitigate some of the biases and influences that can impact your investing.
What we don’t often talk about, however, is your mental health when investing.
I will preface this all with the observation that I’m not a psychologist, nor a mental health expert, nor a doctor. But I have been around long enough in both traditional markets and crypto markets to know that your mental health is as vital to successful investing as is the approach to the psychology of investing.
And yes, in my view there is a difference between the two.
I bring this up as a topic today because when markets have cratered, when the fear and anxiety of the markets is at all-time highs, your mental health can take a pretty big hit.
But it’s never something we freely and willingly talk about or ever really deal with when we should.
How you feel at any given time can make a huge difference when you’re investing in this market. I’d argue that in the crypto world, feelings are amplified if you spend any time in crypto social media, be it Twitter, Telegram or Discord channels, or any other general mass market forums.
Let me give you some examples to detail what I mean…
Felling crappy part one
It’s 2014. Mt.Gox, the world’s largest bitcoin exchange, has shut down overnight and goes bankrupt. The first big altcoin boom and bust is in the process of unwinding. The mainstream media got on board with bitcoin’s meteoric rise in 2013, and it is about now that the first real big batch of hate starts flowing.
The usual stuff appears: it’s all a coordinated Ponzi scheme; it’s just a case of the “greater fool” theory playing out; you’d have to be crazy to even be thinking about this; it’s all going to go to zero, and so on.
As a market participant, it’s hard to not let these things get to you. Sometimes you’re ridiculed, mocked, even directly laughed at when trying to explain to people that this is a bigger deal than most people are paying attention to.
I was mocked on TV for my views on bitcoin at the time. I shrugged it off, filed it away in my “you’ll see” file and went about with my business.
But truth be told, it sucked. A lot. It hurt and made me doubt what I was doing.
I consider myself to be highly resilient. I put that down to my upbringing and my Mum and Dad guiding my brother and me to have a tremendous amount of self-worth and self-belief.
But still, when you’re openly ridiculed for your view and belief of something, you can’t help but get a bit down about it. And in 2014 and 2015, it was really tough to maintain conviction and a healthy frame of mind about my journey in crypto.
Then 2017 rolled around and we saw a boom that, at the time, felt as if it would never end.
Feeling crappy: part two
Now, we all know that nothing goes vertical forever. We know that all markets move in cycles.
At the time, however, you never stop believing that it will only go higher. This kind of market becomes the complete inverse of the depths of darkness in a market bottom. You are flying, everything you do people love. Songs of praise come your way. Things feel good.
However, when markets are peaking in crypto, you’re only in that state of euphoria until the market turns.
When it falls again, when the next bust cycle rolls around, everything that you feel bubbling in the pit of your stomach comes right back to the surface.
Anxiety, self-doubt, fear, and a constant barrage of attacks on everything you do are quickly back. Once again your mental health is put to the test.
Again, let me give you an example.
In January 2018, the market is peaking. Then, for the next two years, it crumbles. From highs of around $20,000, bitcoin falls to as low as $4,000 in March 2020.
Then all the old criticism comes back to the mainstream media.
Once again, you’re attacked, ridiculed, mocked, sniggered at, at parties you’ve now become “that guy” that suckered everyone in to investing (and now losing) money in those stupid crypto tokens.
If you’ve been in the crypto market long enough, at some point you’ll become “that crypto guy” (or gal) because you dared to share some knowledge with friends or family. You’ll brush it off, have a little uncomfortable chuckle and not have much more than an “oh well” response simply because the argument is not worth the effort.
You know that the market moves in cycles, and you’re confident that another cycle will come. You know that it’s about time in the market, and that all the vitriol flowing your way won’t last when the market booms again.
However, you wonder whether just maybe they’re all correct and that this is the end: the implication is that you’ve been a complete idiot over the last few years.
You then realise that no, that is noise, and from a bunch of people who don’t understand fundamentally what’s going on. You can see that what’s happening in the growing crypto stratosphere is building to something bigger again.
You know that a bit of patience, conviction and self-confidence will see you through. It’s hard, and you feel really crappy during that period, but you wait. Then, you invest, you’re active and you’re making moves while most other people stand by: they are happy to ridicule but show no sign of actually doing anything.
Then… it happens again.
Feeling crappy: part three
It’s early 2021. The market turns, and flies and flies, and hit even bigger and more exciting highs. You’re on top of the world, making returns that used to be in the realms of dreams. But now it’s reality, for you at least.
Then everyone else piles back in. They capitulated in the previous cycles and fallen into the trap of buying high and selling low fate. They “have hated” the crypto market but are quick to come back around.
The market turns down again in late 2021. The cycle repeats once more.
You feel down, you have a lot of mud slung at you, you’re ridiculed sometimes directly and often indirectly from all angles.
By now though, you’ve been through several cycles in the world of crypto. You know and you see that progress, growth, development is all building. You know that the next surge should be even bigger, better and more profitable.
But here is what really matters: in the bad times in the past, you were never alone; and in the bad times in the future, you won’t be alone.
Not feeling crappy anymore
While a lot is said about the negativity that can exist in the crypto markets, there are always a lot of people who going through all the same things. They all face self-doubt, fear and anxiety, but all with the knowledge of bigger and better things coming just around the corner.
This is where we are now. We are at the point where feeling crappy is as bad as it gets. The punches getting thrown from all sides are pretty strong, and it can feel overwhelming at times just existing in this market.
However, resilience and self-belief, conviction and taking positive action is what’s needed.
This is now my third major bear market bottom. I can guarantee you it never gets easier. Your mental health will take a hit and at times you’ll wonder what the hell you’re doing in this market.
Let me assure you of this, however: right now is exactly how I’ve felt twice before. In 2014 and in 2019 I remember feeling exactly this way. I remember the fear, the anxiety and self-doubt. I remember the hate, the words, the barrage of attacks. They’re all filed in the “you’ll see” folder like many before.
Feeling like this in this market can suck. A lot. But what’s coming around the corner in my view is going to be bigger and better and (hopefully) more profitable than anything we’ve ever seen. If we are right now in a period like the depths of 2019 and early 2020, then there is simply only one thing to do.
That is: be active. Position yourself for that next massive run in the crypto markets. Every fibre in your body might be telling you to run away from crypto. The right thing to do is precisely the opposite.
It’s times like these in crypto markets when real fortunes are made.
If you are struggling with this market, with your state of mental health and want to just get something off your chest please write in to me at editorial@southbankresearch.com. Make it clear that your email is specifically for my attention.
I will personally respond to your email.
Most of us have been here before. It is OK not to feel OK. Before long, the market will be OK once more.
Until next time,
Sam Volkering
Editor, Sam Volkering’s Crypto Network
