When it comes to pricing a market, don’t follow the current narrative, think ahead of the narrative. The current narrative is already priced in.


Whether it’s crypto or stocks or any markets.

By the time we see the first signs of a new market narrative, it’s already too late.

Take this hypothetical scenario for instance:

Imagine people who are waiting for this economy to get better before jumping into stocks or any market. They want to make sure things are recovering before buying the bottom.

That’s a bit of a paradox.

By the time economic metrics and things like GDP, are all in the green, they will already be way too late to the party.

Even by the time we get confirmation of good CPI numbers, and inflation cooling off, it will be too late.

The smart money will get in when they see the first signs that inflation might be cooling off. Maybe they’ll get in when they see OPEC increasing their output, and oil prices beginning to drop down. Which would eventually lower prices at the pump for consumers. Lower the cost of transporting goods, and lowering the cost of goods. And cool off fuel prices for the supply chain, to help it in its recovery, further lowering costs for businesses.

But timing the market is still a gamble.

Even if key factors show early signs of improving, they could get worse the next month for any number of reasons.

Or maybe something else could come into the equation. Maybe the cooling off in the housing market goes from correction to major crash. We never know which way it could tip.

But if you really want to time the market, you have to take those risks.

This is why you will sometimes see the market going green for seemingly no rational reason, when things are still going bad. It’s doing its usual thing: speculating.

Otherwise, if you just try to time the market, but wait for WSJ, MSNBC, or Marketwatch to tell you that the recession is over, you’ll have long missed the boat.

Bonus content:

What are some strategies on deciding on how to get in or out of a market?

Here’s 3 different approaches:

1- Play it safe, and don’t chase big gains. Follow the beginning of a trend once there is confirmation, without worrying about timing a bottom. And begin to pull out when the trend has been going on for a while, and while it’s going at full strength.

You’ll enter late, and pull out too early. And you risk staying in the sideline for a long time. But you are less likely to get burned, and are just capitalizing on the sweet spot of a trend. In a volatile market like crypto, this is gonna be easier said than done.

Trends can shift quickly.

2- Time the market. This is where you are trying to be clever and maximize your returns. Trying to buy the most discounted price and sell at the most inflated price. Maybe even buy and sell short term dips and peaks. Maybe even short or go long. It’s risky, and you’re more likely to get burned.

3- Dollar cost average, and similar strategies. This is where you don’t even bother with timing and trends. It’s more of a long term strategy, where you assume an asset will do well over time.

You just have to remember that dollar cost averaging isn’t just buying every month, it’s also selling.

But this doesn’t always work, because not every asset goes up in the long run. This method is best combined with a strategy of diversification.

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