It’s been a long, long, LONG week on the financial markets. Coronavirus fears plus an oil price drop made for a one-two punch that has left quite a few people scratching their heads. Trading was halted for a bit, and the Dow dropped 2000-plus points. That was MONDAY…
Tuesday was meh and now Wednesday brings talks of a bear market having finally arrived. You name it, it’s in the red.
Crypto people thought this could mean a flight to safety for BTC and other names in the space. Wrong. Bitcoin is really not digital gold (yet) and also doesn’t have a hundred-year track record of results.
SO…we thought we’d take a look at the year-to-date charts and try to get a handle on what the first ten weeks of the year — and what the coronavirus crisis — can tell us about what the heck is going on.
Headline 1: 11.5% Up from the Low
Okay, that’s one way of looking at it. Had you timed the market exactly right and bought at the low of $6994.28 AND held to today, you’d be up 11.5%.
The low wasn’t too far from the opening price in 2020: $7203, so an 8% gain if you bought on New Year’s Day. (Compare to a volatile stock, I guess.)
Headline 2: Had You Called the Top…
Let’s use the scenario above — you buy at the low because you are really really really smart and you “called the bottom” and “bought the dip” — to show you just how you could have done: a 48.7% gain!
Headline 3: What If You’re Bad at This?
Ah, let’s say you’re not so good at calling the market. You buy at the top and sell today because you think you’re calling a bottom.
You lose: to the tune of 33.4%.
HEADLINE 4: DON’T TIME THE MARKET
If there’s one thing that people who trade stocks for a living will tell you it’s this: “DON’T TIME THE MARKET.”
And if there’s one thing that we’ve told you here a few times, it’s this: “PLAY THE LONG GAME.”
Listen, We Don’t Have the Answers…
But — and we’re not financial advisors, do you your own research, etc., etc. — it probably makes sense right now to look at your own situation before doing anything rash like buying or selling tons of $BTC. Do you need the money for something else? What about your own long-term view? Do you feel like playing the market?
It’s a crazy world — made crazier by the fact that no one really knows what will happen to Bitcoin and crypto — so you’re best to stay grounded. Don’t watch too much news. And don’t go batty trying to time any market.