Bitcoin slumped over 50% from its all-time high.
While these drawdowns are always painful, they are nothing out of the ordinary.
In fact, Bitcoin has experienced plenty of such drawdowns in its history.
Just take a look at the chart below.
Holding through multiple 50 to 80% crashes takes an insane level of conviction and mental resilience. Those with experience understand that you don’t get the right to enjoy exponential return without stomaching lots of pain along the way.
I thought I would share a few quotes from investing legends that may help you alleviate the pain.
Here are a few of my favorites:
“You make most of your money in a bear market, you just don’t realize it at the time.”
Shelby Cullom Davis
“Buy when there’s blood in the streets, even if the blood is your own.”
Mayer Amschel Rothschild
I've always said the key organ here isn't the brain. It’s the stomach. When things start to decline - there are bad headlines in the papers and on television - will you have the stomach for the market volatility and the broad-based pessimism that tends to come with it?
Peter Lynch
“Volatility is good. Stock Market volatility is what helps it give you stellar returns.”
Peter Bernstein
“The first rule of investment is ‘buy low and sell high,’ but many people fear to buy low because of the fear of the stock dropping even lower. Then you may ask: ‘When is the time to buy low?’ The answer is: When there is maximum pessimism.”
Sir John Templeton
“For the investor who knows what he is doing, volatility creates opportunity.”
John Train
“The best way to measure your investing success is not by whether you’re beating the market but by whether you’ve put in place a financial plan and a behavioral discipline that are likely to get you where you want to go.”
Benjamin Graham
“Far more money has been lost by investors trying to anticipate corrections than lost in the corrections themselves.”
Peter Lynch
“Invest for the long haul. Don’t get too greedy and don’t get too scared.”
Shelby Cullom Davis
“Your success in investing will depend in part on your character and guts and in part on your ability to realize, at the height of ebullience and the depth of despair alike, that this too, shall pass.”
Jack Bogle
“The intelligent investor is a realist who sells to optimists and buys from pessimists.”
Benjamin Graham
“The stock market is a device to transfer money from the impatient to the patient.”
Warren Buffett
To sum up, it’s essential to realize if you want to be a day trader or an investor. If you’re trying to outsmart the markets or simply dollar-cost-average into a great asset.
The investing legends and the data confirm that the DCA investors tend to overperform the traders over the long term.
So ask yourself what kind of investor are you?