It’s going down, crashing, a sea of red on Coingecko. Or maybe, you bought and held, but over time the Profit/Loss trends red and your loss grows bigger. At some point you sell - and now you have less than what you started with.
The common maxim “don’t invest what you can’t afford to lose” begins to flash across your mind. “Obviously!” You say to yourself, but it doesn’t help.
You peruse forms and articles on Reddit, Publish0X, and everyone says HODL!!!!!, or calls you weak handed. Anonymous users repeat platitudes.
But nothing helps.
If you’re like me, regardless of the reason for the loss, it never feels good. Why? Because investments are money. Crypto, stock and any number of other investments are investments for one reason - to grow the money we put into them. So when we lose, not only have we not accomplished what we set out to do, but actually ended up with less than when we started.
Losing never feels good, and losing money feels even worse.
But losing is never the end.
When I lose, or make the decision that I’ll sell at a loss, I breathe. I take a breath, in through my nose and out. And I sit - what’s done is done.
Panic selling, or making a conscious decision to sell at a loss can often seem overwhelming. Like you’re being boxed in. Questions and doubts swirl. It’s normal.
But remember first to breath. It will help to slow your heart rate and clear your head. Truthfully, breathing helps in any number of high stress situations. But especially when you just lost a sum of money.
We can breath - but breathing is easy. Dealing with self doubt, disappointment, and despair is much, much harder.
It’s easy to be chastised online for a bad decision. It’s even easier to read comments or articles which make you feel worse. “I shouldn’t have bought in” - “I should have sold sooner” or, maybe, the price goes up after you sell and you think “I should have waited.”
Whatever the situation - it’s easy to let these thoughts take over. And, the longer they fester, they harder it gets to sort through them.
Over the years I’ve learned to tell myself truths - and then analyze what happened so I can learn from it later.
“It’s ok to lose money”
“I made the decision to invest and I knew this was a possibility”
“I used my best available knowledge to make this bet”
“I am no better or worse of a person for this”
I repeat these mantras to remind myself that the emotional loss, was truly based in a real game of chance.
Think of the classic example of table flipping - but in this case, before I flip the table after I lose a game a talk myself down and say “I did my best, I took a risk. It didn’t work out how I wanted so what do I do next. How can I learn from this? What do I do different next time?”
The “what do I do next” is the most important part of loss. Being able to talk yourself off of an emotional ledge is hard and takes work. But strategizing your next move is what will make or break that loss.
For example - I invested a considerable sum in BAT. BAT underperformed my expectations, based on the research I did, and I ended up losing a significant amount once I decided to exit my position.
After I sold I had a choice - I could take what I had and walk, or, I could try to recoup that loss. I decided to invest that remaining sum in Bitcoin, and within a two and a half month period I made back two times what I invested - recouping my loss and then some.
Of course, this could be seen as stroke of luck, considering I didn’t know that Bitcoin was about to jump so high - but the real point here is that I made a plan and I acted on that plan. I sold at a loss, but pressed forward with my goals.
I analyzed what I got wrong with BAT, why I bought in and why I sold. I then made a decision to put that money elsewhere.
I’ve often found that formulating my next steps after a loss or a gain helps to calm me - it forces me to look at reality and my goals. It helps me align myself on the side of reason and calm. It keeps me focused on my ultimate goals.
In many films, characters like to state they “lost the battle but will win the war”. Contextualizing a loss in the grander picture of my investment goals and financial goals helps me to see it as a step.
It's easy to see a massive loss as the end. And, if all your money is tied up in a single investment and you lose big - it probably seems like the whole world is crashing down.
But remember - it’s ok to feel. It’s ok to hurt. It’s ok to be disappointed. But injuries will eventually heal. A loss may set you back, but if you keep moving forward - your persistence will be what defines you.
So breathe.
Rebase.
Strategize.
Move forward.
And if a loss ever makes you feel like killing yourself - please please please contact your local suicide hotline. I’ve been there in a different life - and trust me - the world is better with you in it.
A list of suicide and emergency lines by country:
https://en.wikipedia.org/wiki/List_of_suicide_crisis_lines
