Checklist You Need to Go Through Before Investing in Crypto

If you are afraid of cryptocurrency crashes but are at the same time fear to miss your chance to make money, this checklist will help you decide if you should invest in cryptocurrency right now.How to make rational investment decisions while avoiding the herd instinct? Here are some guiding questions. Ask them yourself before investing your hard-earned money into another trendy novelty or technology.Any investment involves the risk of losing at least part of the capital. It’s not a bad thing if you need the money in just a few years – by then the portfolio can be renewed. But what if money is needed today? Be sure to create a reserve fund and save for a rainy day before you start investing.Certainly, you can rely on the state or children, and you can open an account where you will regularly transfer money that can then be spent. You shouldn’t risk these funds either.Every saved dollar is an earned dollar. Analyze your financial situation and first repay loans with high interest rates (for example, on plastic cards). Buying cryptocurrencies, you can both make money and lose. But if you pay off a credit card debt at a rate of, say, 20%, you are guaranteed to earn (save) this interest. Make the rule of paying off high-interest loans first.Buying real estate is expensive. It is necessary not only to pay the first installment, but also to spend on repairs, furnishings, relocation, as well as replenish the reserve fund and remember about mortgage payments. By investing in various assets now, you run the risk of not having the time to save the amount you want.Shares, bonds, gold bars, cryptocurrencies … It doesn’t matter what exactly is in the portfolio, the main thing is to understand your investments well. Be sure to get to know the potential risks, benefits and costs; decide how they will fit into the overall investment strategy. If you have never heard of any company or, for example, cryptocurrency, be sure to search for the information yourself. So you will be aware of any investment manipulations and scams.Do not fall prey to emotions, do not buy assets solely on enthusiasm. Is there a good reason to invest in this cryptocurrency? Ask yourself, is this really a serious investment, or is it a gamble that someone will pay more for it in the future? This does not mean that one should never speculate. Just make sure that you are correctly assessing all odds and risking only money that you can afford to lose (not all retirement savings or funds saved for the education of children).Answering the previous questions, you can decide that you have thought through all the nuances. Alas, even the most experienced investors make mistakes. It is extremely important not to make the mistake too costly. Don’t invest more than 10-15% of your portfolio in one asset, no matter how promising it may seem. In other words, when are you going to sell? For example, you can set a rigid rule: if the investment loses X%, you get rid of it. The same can be done with profit: if the asset grew by X%, you sell. The key in this issue is to keep emotions away while making decisions.