Leaving Fear And Greed Behind: Learning The Investor Mindset

 

Investing and building wealth isn’t for the faint of heart. To be able to build true wealth, you need to learn the investor mindset. Halle Eavelyn looks at cryptocurrency and current events and asks the tough questions. We learn why mindset is important in investing and what you need to do to get into the investor mindset. Do you want to build wealth? Then this episode is for you.

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Leaving Fear And Greed Behind: Learning The Investor Mindset

I am first and foremost, a transformational wealth coach. While I mostly work with women, I have been so grateful over the years to get to work with hundreds of men and women as they grew from their original journey and plan of the maximum amount of money that they thought they could make, expanding their ideas until they were able to call in the income and the wealth that they desire.

Over that time, I’ve had a chance to see some mindset differences. It’s been pretty powerful to see how much mindset affects how much money you make. In my opinion, it’s everything. It’s why I do what I do. Mindset affects everything. As I’ve moved into the crypto space, I have started studying the mindset of investors versus the mindset of a trader or somebody who is trading stocks or crypto on a daily basis or regularly and often as opposed to somebody who is investing in something for the long term. It’s what they call in crypto, hodling or holding. It originally came from somebody making a mistake with the word hold, misspelling it online. Now, they call it hodling when you hold long term.

There’s a big difference in the mentality of what you see when somebody is in this for what it’s going to be like in 10 or 20 years. I have a friend and a former client who is a trader in the stock market. He posted something on my Facebook page. He said, “The crypto market is going to crash.” That was interesting because he certainly knows a lot more than I do about stocks, but it isn’t a question of a crash. The car crash will total your car. Once your car is totaled, it has to be sent to the junkyard. You need a new car.

Even the stock market crashes that we’ve had like the stock market crash in 1929, the internet stock market crash in 1998 and 1999, the housing market crash, the stock market crash, and everything crashed in 2008 and 2009, those were recoverable.

If you look over time, despite the fact that there have been drops, there also have been significant rises afterwards. What we’ve seen over time is that the stock market has continued to go up and up. Even when a war is declared, it ends up being good for the stock market. The crypto market is no different. While I was recording this episode, I have watched Bitcoin break out and go through the roof.

Because Bitcoin is the oldest cryptocurrency and the one that everybody sets the standard by, it’s the one that we talk about and I see information about the most online. There’s a theory that first, Bitcoin goes up and then Ether, which is the Ethereum-based coin, goes up, and then they say Altcoins, which everything else goes up after that subsequently. That’s one of the theories.

Everybody measures everything against Bitcoin. Bitcoin has been going up fast. Are there factors for that? Sure. They were able to get a lot of Bitcoin to Ukraine very quickly. That’s what I’ll call a use case for how different crypto could be from regular Fiat or cash money when a crisis occurs and you have to have that money very quickly. Despite that new use case, there have been a lot of other things, inventions or innovations that have enabled crypto to rise.

 

Bitcoin has seen as high as $69,000 price. That’s its all-time high as opposed to when it’s hovering in the high $40,000s. It has gone up $8,000, which is about 20%. It’s been really fast. As we see these ups and downs go very quickly, it’s interesting to watch people’s feelings. This is tracked on the stock market and the crypto market by something called the fear and greed index. That’s what we’re looking at. What is that? That is an indication of people’s mindset.

The fear and greed index was at 60 greed. That means people are starting to accumulate. Whereas a few weeks ago, the fear and greed index was in fear. There is extreme fear. There’s panic. There’s euphoria. There are all kinds of phases to the fear and greed index. What I find fascinating about it though is that it indicates people’s mindsets.

The price can be driven up through the roof or down through the floor based on what people believe is going to happen or what people are afraid of happening as opposed to the reaction of it did happen or it has happened. They’re thinking, “It’s going to happen,” and that’s what they’re reacting to. In other words, they’re reacting to their thoughts. They’re reacting to their minds and what their minds believe is possible. We see a lot of that in many areas.

When we have a chance to get to witness it over and over again on the daily inside of the stock market and the crypto market, I want to remind everybody that in order to have the mindset of an investor, you need to pull yourself out of the fear and greed index completely. Long-term, crypto is expected to do well. People talk about bank and government regulations and all of that stuff.

It’s coming because crypto is still the Wild West and that is going to change. When all that stuff and crypto has become its own thing, the real fear that we have about cryptocurrencies and in general, the whole online money market is if they turn off the lights. If we all lose power, in which case, lots of other things will have gone wrong first and will be ruined forever, but if the power were to go off, our money will disappear.

In order to have the mindset of an investor, you need to pull yourself out of the fear and greed index completely. Click To Tweet

The truth is if you are keeping a safe at home with cash in it or gold or silver, then you are going to still have tradable money if they turn off the lights. I know people who do. I have seen people’s gold and silver in their safes. Otherwise, all of our cash, everything in every bank is all ones and zeros. It’s all data that are not physically in the bank. When they say, “Crypto is so risky,” that’s a big risk. It is true of all of our money, not just cryptocurrency. Let’s assume the comet does not hit the planet, then what? It’s a matter of looking long term and seeing what is possible.

It was hard to see in 1994 and 1996, what was going to start to happen with the internet. After the internet stock market crashed in 1998 and 1999, everything went through the floor. People thought Amazon was going to go out of business. Apple almost went out of business. A lot of companies almost died that year. Yet those are some of the biggest companies that we have now, with the biggest market caps and the biggest product lines and all of that.

When you look at those pieces, it’s a matter of seeing longer term than the fear and greed index, than the mindset of everyone is thinking. I talked to somebody in the Women in Crypto group that I belong to about a particular token or coin that I liked. I said, “Long term is so great because it has all of these projects behind it. It has all of these amazing developers doing work on it. She said, “Yes, but it hasn’t moved in months.”

She’s right. It’s moved by 10%. Compared to cryptos that are moving 50% in a single day, is she making herself rich off of it in a single day or a single week? She’s not. In my opinion, that’s not what I’m looking for. I’m looking for the stuff that long term is going to have a lot of value. I love the idea of keeping it simple. Let’s buy low and sell high and let’s wait. I haven’t sold any crypto since I got into the market. I have been in acquisition mode.

When they say, “Buy the dip,” it means when it goes down, you’re purchasing. There’s an old real estate expression that I am passionately fond of, “There’s blood on the streets by real estate.” I also heard, “Even if it’s your own blood.” It can be scary, especially if you feel you’re bleeding to death in the streets. The reason that they say that is when something looks especially bad, you can come in and scoop it up.

 

When it comes to real estate, one of the tragedies of the tsunami that happened a few years ago was a lot of the beachfront properties were shacks that had been lived in for a very long time. People had the rights of the owners being on that strip. After the tsunami, all of those little shack properties were swept out to sea. Developers came in and picked up that real estate at practically nothing.

Now, they will develop it and it will change the entire landscape of the shoreline. That’s the thing where there was blood on the streets or in the water, and people bought real estate. What we see happening a lot in the stock market and in the crypto market is as the numbers go down, that’s when people scoop in and start to buy up those stocks or those coins so that they are accumulating them at a lower price.

It takes a certain amount of mindset and nerve in order to make that happen. You have to be going in the opposite direction like a salmon swimming upstream from almost everyone else. The truth is in this day and age of the internet being ubiquitous of us having access instantly to all of the information as it comes out, everyone’s opinion is going to be different.

The question is, what are your core goals? What are your core intentions? What are your long-term core goals? It’s all fine and good to make a bunch of money overnight. If you are looking to grow wealth in the long term, are you buying and selling on a daily basis? You’re probably not, for a couple of reasons. One, short-term capital gains, and two, you’re busy. You’re running your life.

If that doesn’t work for you, one way that you can get around that is by the simple method of Dollar Cost Averaging or DCA. Dollar Cost Averaging means you put it in when it’s convenient for you. I buy Bitcoin every Friday. That’s something that I have chosen to do. It gives me incredible peace of mind. I was buying Bitcoin every Friday at $30,000. Now I’m buying Bitcoin every Friday at almost $50,000. When Bitcoin’s up over $100,000, I’ll be buying Bitcoin every Friday.

Money is attracted to money. Money is attracted to the flow of money. Click To Tweet

Why? Because in the long term, I believe that it’s going to be worth a lot more than that. That is my opinion based on my research. I’m not asking you to listen to my opinion based on no research. I’m asking you to have this spark and idea in your head of, “What would I love with my money? How would I love to invest? What would take away the fear and the doubt and the uncertainty? What would cause my fear in greed index to be calm?”

I don’t think there’s calm on the chart but never mind. You get the idea. Once you decide what that is, then do your research on your crypto, your stocks, and whatever it is that you’re thinking about doing. Know that when you do, you want to come in from a mindset of peace, from a mindset of calm, and from a mindset that does not include need, especially in the crypto market. I’ve gone all-in. I got out of my stock position in order to get into my crypto position. Why did I do that? Because it was so important for me that I felt that I wanted to go all in.

Do you want to go all-in? Probably eventually, but not now because you haven’t researched it yet. You can’t take my word for it or anybody else’s word for it. It’s important. Part of this is going to be because of your learning style. Part of this will be because of your risk style. If you’re the kind of person who likes to take a big risk and go all in like me, that’s awesome.

If you’re risk-averse, that’s the last thing you want to do because it’s going to make you feel uncomfortable. Money is attracted to money. Money is attracted to the flow of money. If you are holding on to something tightly, if you’re being greedy and miserly about it, you can accumulate and hold onto it, but it’s not as easy as if you create it with the flow of knowing that money is going out, money is coming back in, and that you relax into that.

As you move into this new energy of money and feel it’s possible for you to create wealth using the new cryptocurrency and decentralized finance platforms as a way to grow your wealth, you don’t want to come at it from a place of, “I need this,” but rather from a place of, “This is added to me because I have the mindset of knowing that wealth belongs to me. That wealth is already mine.” I hope this episode has been valuable for you. I hope that you will share it with all the women in your life. Please comment, like and share this episode and subscribe to the show as well. I’ll have another great guest. I’m looking forward to seeing you then.