Updated: May 17
Astute traders will be enjoying the rollercoaster.
The largest cryptocurrency dropped as much as 15% to just above $46,000, before paring some of the retreat. It was down about 6% to $50,980 as of 1:09 p.m. in Tokyo on Thursday. The rush to sell briefly caused outages at some digital-token exchanges. Bitcoin is still up more than fivefold in the past year.
Musk’s move comes after Tesla disclosed in February that it had purchased $1.5 billion in Bitcoin and planned to accept it as a payment. That announcement added legitimacy to the cryptocurrency as an increasingly acceptable form of payment and an investment, especially coming from a large member of the S&P 500 with a high-profile CEO who commands a big following among retail investors and the public.
Twitter statement that send the crypto down, fast.
So, what to do? Buy or trade the volatility?
Fast rising stocks & assets are often unpredictable and market volatility appears unprecedented in recent times.
Warren Buffett, quotes "be fearful when others are greedy and greedy when others are fearful."
Should I follow the crowd when Investing?
As most investments don’t always perform as we had hoped, and we glance enviously at instances of meteoric rises of some individual assets, that we didn’t invest in, an investor needs to be scouring the financial world for opportunities they believe will grow and grab the opportunity early, entering late can be expensive.
Entering the market at the top is often the worse thing to do, especially for an inexperienced investor. The markets are cyclical and will correct at some stage, many are already predicting doom sooner rather than later and are calling it an overinflated bubble.
Even though the developed world’s Markets, in general, have performed better than most expected amid the worst pandemic in living history, seeds of doubt are starting to emerge, as to how we will make an economic recovery over the next few years following COVID19.
What are the long-term implications economically, with increasing unemployment and the return of pumping cash into the market, quantitative easing, negative interest rates, trade wars and environmental concerns? It has got to cost us in the future.
However, not to be too pessimistic, certain companies will continue to grow and profit and looking for the right ones to buy can be as important as any investment we make in these times.
How do we find the right opportunities? The information out there can be confusing and sometimes we may just go with the flow, are we being unwittingly swayed by the web?
Do the growing social media influencers really make us do what they want us to do?
I must admit, I am constantly scouring headlines on the web and I am sure they have an impact on my decision making. Consciously or subconsciously.
Published in 2017. The Institute for Public Relations reported that nearly one-quarter of respondents (21%) said they were likely to seek advice in decision-making related to financial services via social media.
Raddon Research Insights found that overall, 30% of consumers say that information or advice they found on social media had influenced them to purchase a type of product or service. When it comes to making a financial product or service purchase decision, the odds increase, influencing almost 4 out of 10 of us. Jan 9, 2019
This type of research findings fits into the current debate highlighted recently in the US, do people follow other opinions blindly without real consideration to the facts via social media? Are alleged algorithms created by these influential platforms herding us into a certain direction???
Hey, hold on, aren’t the almost extinct “financial advisors” also steering us into certain investment decisions? Influenced by their commissions and own company agenda? Aren’t analysts doing the same. Aren’t we influenced by patriarchal members of our family to invest in certain ways?
Whatever the reasons we decide to invest in certain assets, there must be an array of factors that influence us. The question is, are we doing the right things all the time or are we just following the crowd for the sake of it without making our own informed decisions?