April ended with the market in a downward trend. The first two weeks of May spelled a continuation of this trend toward year lows, cryptocurrency was among the sectors hit hard by the down turned market. Is this a time to fret or a time to invest?
When you’re looking at investing in the stock market, you must first do some homework. Understanding it is harder than it appears will serve you well in being successful. In the last two months we have seen a downward trend. Some big stocks like Tesla (TSLA) went up in the the $1,000’s and down into the $600’s making plenty of opportunities to day trade TSLA through this time.
When the market is trending down, there is still opportunity for short term trading in doing puts. Trading options carries additional risk since it generally comes with fees for trading. If you do not read the charts well, you can still lose money with puts. However, it’s really important to recognize the opportunity to still make money on a consistently red market.
Benefits of Long Holds
What goes up must come down, or in this case what goes down must go up! When the stock market is struggling, it is important to see the opportunity in gains. Checking out the all time lows and all time highs will will reveal opportunity for making money.
It is valuable to know the dynamics of the company you are choosing to invest in because you do not want them to go belly up in just a matter of days. Businesses like Apple are sturdy companies that are overall wise with their income and make efforts to disrupt the tech sector. If you invest in the slump, when the market returns to highs you will have made a good chunk of change. This could be in a few months or years, but there is good reason to think if the company is solid it will rise when the market does.
Lastly, people decide to invest in cryptocurrency all the time. The problem is when they follow Reddit pumps and do not know how to look at the charts of companies and know it’s a bad call. If you are investing in crypto, you may have been very nervous to keep your investments in while you watched Bitcoin plummet. It is particularly important to understand what problem each coin is solving. The coins that solve problems will be around longer than those that are just alive from pumps. Again, make sure when you invest long term that you know the company and how healthy it is.
If the last several weeks has you nervous about investing into the stock market, understand the opportunity that is still on the table. Instead of just thinking short term, consider how you can make considerable cash on long holds. Be mindful when you are investing long, however, because you want to make sure the company is solid. This is for crypto or any other sector. If you are experienced at trading, don’t forget the power of buying puts in a falling market. These steps will help you make money short and long term when the market is bearish. Above all, make sure you don’t underestimate the challenges trading brings.
What about you, did the market have you selling or buying? What is your plan?