During COVID-19, conversations about real estate, stocks, and cryptocurrency have become commonplace. Whether at dinner parties with friends or family gatherings, everyone seemed to have an opinion. Most were either buzzing with excitement or entirely indifferent. Fast forward to today, and the chatter has died down, with fewer people showing enthusiasm about these investment avenues.
I’ve always aimed to strike a balance, viewing these situations as reflecting broader macroeconomic trends.
Historical Lessons:
Our past offers countless examples, both ancient and recent, illustrating the consequences of unchecked excitement. Historical events such as the Tulip Mania, the Dotcom Bubble, and the 2008 Housing Crisis serve as reminders. Still, as human beings, we have the choice: learn from these historical lessons or join the herd and risk history repeating itself.
Whenever I heard of the ‘next big thing’, my first thought was, “I’ve missed my window.” Instead of jumping on the bandwagon, my instinct has always been to wait and invest judiciously.
Am I wrong? Possibly. I’ve been mistaken before, and I could be in this case as well. But generally, when I hear overwhelming excitement about an investment, I suspect that the risk level is already peaking.
The Age of Hype and FOMO:
With the proliferation of the internet and social media, it seems we’re more prone to FOMO (Fear of Missing Out) than ever before. When everyone shouts, “Stocks!” the masses flock to the stock market. When the buzz is about Bitcoin, there’s a rush to invest in it. But these frenzies often end in deafening silence.
The Investment Apathy:
On the flip side, some people are entirely disinterested in any investments. Growing up, I was often advised against pursuing wealth for its own sake and cautioned that money doesn’t guarantee happiness. Concurrently, there was an emphasis on academic achievement and securing a financially stable job. Such contradictory lessons confused me, especially within Korean culture, where seeking excessive wealth was discouraged, and stocks were likened to gambling.
I regretfully admit that only in recent years did I develop an interest in the principle of letting your money work for you. Reading books like “Rich Dad Poor Dad” changed my perspective, teaching me the importance of acquiring assets.
Striking a Balance:
Navigating the middle ground is no simple feat. Blind enthusiasm for short-term financial gains and complete apathy toward making your money work for you are both unproductive approaches.
Over time, I’ve tried to find a balance that suits me. Currently, my preferences lean towards purchasing index funds like VTI and investing in both short-term and long-term treasury bonds, aligning with my strategy on platforms like Wealthfront. (Here is a link to my personal investment strategy in a potential recession).
I continually seek to learn from those who masterfully maintain this balance.
Conclusion:
For now, I plan to stick with a passive investment strategy. I’ll wait for the market frenzy to simmer down and only invest in companies I deeply understand. While this may seem straightforward, sometimes it’s essential to articulate even the most apparent strategies in writing.