One of life’s scariest experiences is watching the value of your investments crash. The thought of losing your life savings creates a dangerous blend of fear and panic. If you think about selling (what?) it all, take a moment to zoom out and see the bigger picture.

A bear market is 6 months or more in which the value of assets in a market consistently decreases. They are caused by a slowing economy, a bursting market bubble, pandemics, wars, and crises. Six months into our bear market, we can tick off all the causes above—a perfect storm. While many will give in to panic, savvy investors see the bear market for the opportunity it is. As Shelby Davis famously said – “you make most of your money in a bear market. You just don’t realise it at the time”. 

Here are some tips to help guide you through investing in a bear market.

Mind over emotions

Successful investing is all about having a strong mind. Looking past your emotions and the noise surrounding you to make good decisions is the mark of the greatest traders and investors. It can feel counterintuitive and irrational, but history and experience show that bear markets are the best time to invest actively. The growth potential for growth is at its highest when the markets are at their lowest. Luckily, it doesn’t take calculus or economics to turn this potential into generational wealth, just a simple strategy and personal discipline.

Keep it simple – Dollar Cost Average

The most effective technique for investing in a bear market is to Dollar Cost Average (DCA). It is the discipline of investing a set amount each week on the same day, no matter how crazy it seems or what the headlines say. Buying a little weekly will often result in higher returns than if you try to time the market. It averages your investment across a wide range of prices, effectively decreasing an asset's volatility (rapid rise and fall of price). This is especially effective with the volatility of crypto. With prices down as much as 80% in our current bear market, a DCA strategy ensures you get some of the best prices on long-term assets, with incredible upside potential.  

Stick to your plan

Start by deciding how much you want to invest over the next 12 months, then if you would like to split this across weeks, bi-weekly or monthly, choose a DCA day. All that’s left to do is stick to your plan and watch your investment value grow in the next bull market. What happens after 12 months? Start again, adjust your budget and keep on building your financial freedom.

Don’t try to time the bottom

Trying to time the bottom of a market is a trap many investors fall into. Buying what appears to be the bottom of the bear market can be devastating. Nobody has a crystal ball for the crises or unforeseen events ahead. The only way to ensure you buy the lowest prices is to leverage the DCA principle, sticking to your set amount. Trying to buy the bottom has led many investors into a cycle of selling low and buying high – a sure-fire way to erode your wealth and all the hard work done to obtain it.

Stick to established cryptocurrencies

The logic behind this is simple. Well-established cryptos have weathered market downturns in the past and regained their value, delivering profits to those who held them. When crypto has a large market capitalisation (Think Bitcoin, Ethereum, Solana, or Cardano), the price won’t plunge when a few skittish investors sell off their holdings. You can’t say that about newer cryptos with smaller user bases. They are vulnerable to losses. Altify removes the stress of trying to select the more well-established crypto’s with their Top 10 Bundle. The Bundle gives you equally weighted exposure to the top 10 cryptocurrencies by market capitalisation.

Build a diversified portfolio

Diversifying your crypto portfolio across several well-established cryptos and growing market segments minimises your risk and maximises your reward. If we look at the dot-com era as a case study, many prominent companies closed months after the crash. The winners went on to change the world. Having a number of market leaders and innovative sectors in your portfolio gives you the best chance of investing in winners.

Altify has created bundles of crypto market leaders in the most important sectors to simplify diversification. Invest in a selection of cryptos curated by our analysts for performance and safety with one click. Our Crypto Bundles are rebalanced monthly to maximise your Bundle growth and ensure you have exposure to the top-performing crypto’s.

Fight inflation with our Inflation Shield Bundle composed of PaxG, the gold-backed crypto and Bitcoin. Invest in the future of banking and finance with our DeFi Bundle. Add the Smart Contract Bundle to invest in the digital platforms on which the interconnected, automated and decentralised future is being built.

All it takes to turn the panic of a bear market into the excitement of your future financial freedom is your mindset. Get planning today and start your DCA journey. Your future self will thank you.