Cryptocurrency All-in-One For Dummies

Chapter 13

Minimizing Losses and Maximizing Gains

IN THIS CHAPTER

Limiting losses in active trading and long-term investments

Making the most of your returns by noting peaks and valleys

Depending on whether you’re a short-term trader or long-term investor, you can manage your portfolio either actively or passively. If you’re a long-term investor (see Chapter 12 of this minibook), you may find yourself managing your portfolio passively by buying and holding a well-diversified portfolio over a set amount of time. If you’re a short-term trader, you can use the tools in Chapter 11 to manage and obtain your desired objectives in a more active way.

If you’re a big fan of long-term investing, that doesn’t mean you shouldn’t practice active portfolio management. You can get better returns, whether they’re long term or short term, by actively managing your portfolio. Active doesn’t mean you have to stick to your screen all the time and covertly check your investment apps throughout the day during conversations and meetings. This chapter explains some management strategies that can help you find a sweet balance to do it all and still maintain an outside life.

Keeping the Losses Down

A phenomenon called loss aversion occurs in behavioral finance when investors keep the losing assets in ...