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To be able to achieve this, there are several important questions every investor should ask themselves, questions like. 1. What strategies would be more effective to manage risks and also maintain stability in your financial life. 2. How many percent of your income/portfolio is/should be allocated to your Bitcoin investment and 3. Does your Bitcoin investment and strategy really align with your overall financial goals/plans?
And if these questions are asked and answered, then the investor would have a more vivid view and a clearer judgement and perspective to make
more informed decisions that’ll be able to align perfectly well with their current and overall financial goals and objectives.
I surely agree with tailoring our strategies the best we can to our circumstances, yet I doubt that we ever achieve perfection, since we are likely always acting upon incomplete information and also some moving dynamics, yet like you suggest, it is good to be striving to create and maintain strategies that are largely aligned with our financial and psychological circumstances - which also should help to lessen our emotional reactions to BTC price moves (even extreme moves), yet we are still likely going to become emotional even when we might have had set up our systems and practices as best as we are able to accomplish in light of our circumstances.
It is very very unrealistic to always expect perfection in your investment, due to market dynamics and/or misinformation/insufficient information. But when we strive to align our financial circumstances with our psychological circumstances, our emotional reactions to price fluctuations and also help us to set more realistic expectations in our investments and the market generally.
While it’s very natural for investors to have certain emotional responses to the market’s extreme price movements, even when there’s a well thought out strategy in place, but when an investor acknowledges this fact, it’ll be a lot more easier to develop a sort of a coping mechanism that’ll help them manage the situation.
Some of these coping mechanisms could involve. Regularly balancing one’s portfolio, setting realistic expectations, learning and regularly practicing emotional awareness and self regulation. And most importantly, having and focusing on long term goals.
When we learn to acknowledge our strategy’s shortcomings and limitations, it’ll help us prepare ourselves for the potential emotional responses which is a good head start to help us effectively navigate the complexities of Investing in Bitcoin.