LEARNING TO LOVE FLUCTUATIONS,

in #general7 years ago

Yes with BTC, the market can't Tread without Volatility,with the correct perspective ,one can learn to appreciate and eventually seek out investment does harbor the possibility that it might be on a down jump just when you need to sell because you need money ,vola.png

in the case you would in fact lose money in an absolute sense but it would have nothing to do with the intrinsic opportunities for that particular investment over the long term that you shoulkd know about the volatility chart, though is that there's almost no substantive difference between Bonds and Stock, yet we ve already seen that stock provide exponentially more reward.
There are ,certainly a few kinds of investment ,such as troubled company , options and the futuers, or outright scams, where you can lose your money with no hope of ever getting it back.
But in most cases ,in most reasonable investment ,we might say the notion of risk is the really more percisely a notion of volatility.that is the value of the investment will fluctuate uo and down this is a given , based on the permise of an investment and the fact that an investment with no fluctuation can't be expected to generate an equal return to the one that fluctuates ,

in the theory if risk is the actually fluctuation , the greater return you get for investing in something with higher fluctuation is actually a kind of payment for tolerating the fact that the value of your principal may bounce up and down,
the return you earn is a payment for accepting the bouncing principal, and it is also a payment for acceptoing that fact that you might need the money at a time of downward fluctuations.
In a real investment as opposed to a speculation your analytic process has already reduced the chances of permanent loss of some or all of your money to statistical unlikeliness,
in other words , if you choose generic growth stock or index found as your investment,if you choose real investment with investment quality ( as determined by the cerdit ratings agencies such as Standard & Poor's for Example ), the issue of losing your money forever isn't really the right understanding of risk.

the right understanding of risk is an assessment of how often and how deeply the value of your investments will fluctuate , and whether you will be paid enough to accept that bouncing , compared to how much you get paid to accept the bouncing or lack of bouncing in other investement ,
most important , what bare the qualities of the Fluctuations and the qualities of the investment that are fluctuating ? How do they Affect how you feel about the fluctuations ? How do they affect how well you are able to tolerate the fluctuations ?

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