I misinterpreted the last paragraph of yesterday's article. What I meant was:
If the main positions are in Bitcoin and Ethereum, even if Bitcoin and Ethereum are bought at high prices of US$73,000 and US$3,400, the positions will not suffer such large paper losses.
(Of course, I am not advocating that everyone buy Bitcoin and Ethereum at high prices regardless of the risks)
The main reason why buying Bitcoin and Ethereum can have such an effect is because of their high safety factor - I think this is a very important consideration for investors.
I have written repeatedly in my articles before: For the vast majority of investors, if they want to obtain satisfactory returns in the market, being able to avoid one risk after another and avoid one pitfall after another is often more important than being able to seize the so-called "get rich overnight" opportunity.
The recent crash is a pitfall: if derivatives are used in the wrong direction, it can wipe out investors' assets overnight. If the hard-earned money is invested in the wrong target, all the previous efforts may be wasted, and there will be no chance of making a comeback.
In addition to investing large positions in assets with high safety factors, it is also very important to control the price of purchased assets at a relatively safe level - this can reserve a strong enough "safety cushion" for us when accidents occur.
Yesterday I saw a message from a KOL on Twitter. He said with absolute certainty: No one is spared from this big drop, and the market will get better in the future, so there is no need to be discouraged.
I very much agree and recognize the encouraging part of his words, but the statement that “no one is spared from losses in this crash” is too arbitrary.
In fact, if you operate according to the fixed investment method and set the fixed investment price reasonably, how can you lose money?
I set the investment price of Bitcoin at US$35,000 and that of Ethereum at US$2,500. If I stick to this method, the average cost will definitely be lower than US$35,000 and US$2,500.
By maintaining this fixed investment price, even if we encounter a big drop, we will still have a floating profit on the books.
Of course, I don’t care about this meaningless floating profit at all, because I won’t cash out at this price. I always believe that the future bull market will bring us truly rich returns.
Last month I saw a recent interview video of Lin Yuan. In that interview, the interviewer asked him what he thought of the current US stock market.
At that time, the US stock market was still thriving and thriving. The interviewer's tone was clearly optimistic and positive, with a hint of hope that Lin Yuan could encourage investors who entered the US stock market.
But Lin Yuan’s answer was very interesting. He said that he stopped investing in US stocks in 2015 and just kept holding them. As for whether the stock price is rising or falling now, he doesn’t care at all.
I roughly checked the annual trend of the S&P 500. In 2015, the S&P 500 was only around 2,100 points, but now it is 5,200 points. The index has increased by almost 2.5 times.
The chips he got at such a low price, even if they were put into today and encountered the big drop in the past few days, would only be a small ripple for him, and would not affect his basic foundation at all, nor would it affect his emotions and mentality at all.
So he could completely ignore one "plunge" after another, which might seem surprising to others but were just fleeting noise to him.
In the past few days, after experiencing the sharp drop in U.S. stocks and the crypto market, I have a better understanding of the importance of risk resistance and security to investors.
When violent storms strike, everyone else is terrified and worried all day long. Only those who calmly face the wind and move forward leisurely are the ultimate kings and winners.
"Disclaimer: This article does not constitute investment advice. Please learn and communicate with netizens, be rational, establish correct concepts, improve risk awareness, and abide by the relevant laws and regulations of the country and region where you are located."
