chambersjr
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Financial Education: My WORST Investments of 2022 🤦🏿♂️
🕑 Added 2023-01-05 17:08:28 +0000 UTC1. Time Wonderland (Crypto Staking Project)
2. StrongBlock (Crypto Staking Project)
3. Sphere Finance (Crypto Staking Project)
The reason these 3 projects did terrible for me was because I held onto them for far too long.
They were all performing well for the 1st month of me being in them, there was positive feedback from the "community", I did extensive research and due diligence and NOTHING seemed to look out of place but Crypto is the wild wild west, and ANYTHING can happen when you are in the world of DEFI (Decentralised finance) so what ended up happening with these projects was the developers of these projects ran off with investors money. This is known as a rug pull.
Rug pull = A rug pull is a when the developer or owners of a crypto project suddenly abandon the project out of nowhere and "pulls the rug" out from under the investors, which leads to a sharp drop in the price of the cryptocurrency.
This can happen for a few reasons, such as:
- The Developers / owners losing interest in the project
- Running out of money to be able to keep returning to the investors
- Cashing out and running away with the profits. (This is the most common reason and it happens a lot in the world of crypto)
Rug pulls can be devastating for investors in smaller, less established cryptocurrency projects, as these projects may have less scrutiny and fewer safeguards in place to protect investors.
So if you are going to be involved in any crypto project in the future, I would recommend to not invest into crypto with a long term mentality as most of them barely survive a month, if even that.
2022 was a VERY rough year in the markets. Whether it was Crypto, stocks or even Real estate.
As of right now, I am not involved in any crypto projects, I'm parking up my cash and won't be investing again until the markets shows signs of recovering.
Give this a read if you haven’t done so already:
https://www.patreon.com/posts/73290953?utm_campaign=postshare_creator
If you are looking for a steady and reliable investment, just invest into Index funds.
Give this a read:
https://www.patreon.com/posts/53361638?utm_campaign=postshare_creator
If you are looking for a steady and reliable investment, don't try to individually pick out some stocks unless you're doing it with play money.
Index funds return 8 - 20% average per year. This is not life changing but it will beat the rate of inflation.
Index funds lost around 19% in the year of 2022, but again, 2022 was a terrible year in the markets as a whole. (crypto, stocks, real estate) and this is to be expected. It would be unrealistic to expect record breaking all time highs every year.
It is also not realistic for you as an investor to expect that index funds, such as the S&P 500, to perform well every year.
The stock market can be volatile, and it is common for stock prices to fluctuate over time.
There will be years when the market performs well and the value of index funds increases, and there will be years when the market performs poorly and the value of index funds decreases.
When investing in Index Funds (NOT CRYPTO) It is generally recommended to invest in the market as a WHOLE for the long-term, rather than trying to time the market, pick individual stocks or make short-term decisions based on short-term market movements.
This is because it can be difficult to predict how the market will perform in the short-term, and trying to do so can be risky.
Instead, it is generally recommended to develop a diversified investment portfolio that is aligned with your long-term financial goals and risk tolerance, and to hold that portfolio over the long-term.
The S&P 500 is a diversified investment portfolio.
The S&P 500, or Standard & Poor's 500, is a stock market index that is made up of 500 of the largest publicly traded companies in the America. It is widely regarded as a good representation of the overall U.S. stock market, and it is often used as a benchmark for the performance of other investments.
An index fund is called an "index fund" because it follows a special list of companies, called an "index," that are very big and popular. The index fund buys a little bit of each of these companies, so it has a lot of different investments all in one place.
This helps make the index fund very safe, because if one of the companies doesn't do well, the other companies might do better and help balance things out.
Index funds can be a good way to save for the future because they can help your money grow over time, and they are usually not too risky.
Index funds offer a number of benefits to investors.
They are typically low-cost and offer broad diversification, as they hold a diverse portfolio.
However, it is important to keep in mind that index funds, like all investments, come with risks and may not always perform as well as expected.
Even during tough times in the market, it may be a good idea to continue investing, as long as you are comfortable with the level of risk and are investing for the long-term.
This is because the market has a history of eventually recovering from downturns, and continuing to invest during these times can allow you to take advantage of potentially lower prices and potentially earn higher returns over the long-term.
However, it is always important to carefully consider your individual financial situation and risk tolerance before making any investment decisions.
I have written an article on understanding your risk tolerance, read this before investing into anything.
https://www.patreon.com/posts/66279707?utm_campaign=postshare_creator
