Cryptocurrencies can be complicated. As a busy medical professional, you likely do not have time to research tokens or the nuances of this specific asset class. As you invest, how will you know whether you are doing the right thing? As prices zoom up and down, it feels like you should do something in response to market movements, but what exactly?
At Makara, the first automated cryptocurrency investment adviser registered with the Securities and Exchange Commission, we believe investing should be smart, inexpensive and simple. We have distilled our philosophy down to five key rules.
Stick to your plan
These markets are very volatile and will go up and down frequently. You cannot control that but you can dictate when and how much you invest. Be consistent and focus on what you can control. Investors who chase good performance or run away from poor performance are less likely to be successful.
Do not try to time the market
It is difficult to know where cryptocurrency prices will move in the short term. The trick is to not worry about the short-term market. Focus on the long term and invest your money when you can. Do not waste time guessing where prices will go next; instead, focus on longer-term investments.
Diversification can reduce risk without hurting returns. We have long known about this in the traditional investing world, but it has been slow to arrive in cryptocurrency. Some assets go up in price, others go down. A balanced approach can be beneficial.
Invest in yourself while you invest in the market
Learn about what you are investing in along the way. The technology behind cryptocurrency is fascinating, and learning about it can be done in small steps. Developing an appreciation for cryptocurrency’s innovations will give you the conviction to stick with the asset during volatile times.
If you believe that cryptocurrency will be valuable over the long term, you benefit by getting started sooner rather than later. The best way to take advantage of the next wave of excitement is to invest today.
If you are already investing or considering investing, the five tenets above serve as a foundation to incorporate cryptocurrency into your larger investment strategy.
Jesse Proudman is the co-founder and CEO of Makara as well as the co-founder of Strix Leviathan, a cryptocurrency hedge fund. Prior to Makara and Strix Leviathan, he served as an IBM distinguished engineer focused on blockchain and cryptocurrency. To learn more about cryptocurrency investing, visit makara.com.
Makara Digital Corporation (“Makara”) is an investment adviser registered with the Securities and Exchange Commission. Registration as an investment adviser does not imply a particular level of skill or training. Makara exclusively provides investment advisory services related to investing in cryptocurrencies and other digital assets. Makara is not a broker-dealer, exchange, custodian or wallet provider, and is not intended for frequent trading activity. Investing in digital assets is highly speculative and volatile and Makara is only suitable for investors who are willing to bear the risk of loss and experience sharp drawdowns.