According to Cointelegraph, a media specializing in cryptocurrency on the 26th, Bank of America praised the virtue of *HODLing in its report.
The new study of this multinational investment bank confirms what many of us have known so far. ‘Investors should never try to match the timing of the market.’
(* HODL : A popular meme on the net in North America, where hold is used as a typographical letter. It is a non-technical term used in cryptocurrency or stock markets, with the intention of not selling in order not to lose money if the price falls below the point where the person bought it.)
When investing in financial markets, 1)’panic selling’ often leads to missed opportunities and 2) waiting for a downturn can lead to missed out on even the most lucrative days to hold a particular asset.
This fact appeared as a general phenomenon of the’S&P 500 Index Comprehensive Study’ conducted by Bank of America (BoA).
Bank of America strategists used data from the 1930s to HODL We found that the strategy could yield a total of 17,715%. On the other hand, if investors try to match the timing of the market, they can miss even the best trading day opportunities.
Missing 10 of the S&P 500’s best trading days on a 10-year basis is said to lead to a loss of 28% of the total return.
The BoA also found that the market heyday often comes from the worst declines.
Savita Subramanian, head of quantitative strategy for US stocks at the BoA, said, “Leaving your investments in the early months of the year can help recover losses from bearish markets. It takes an average of 1,100 trading days to recover losses after a bearish market. “He explained.
Cryptocurrency investors, especially Bitcoin (BTC) holders, are known to have a high tendency to hold long-term.
Industry data show that over 60% of Bitcoin’s circulating supply has been stationary for more than a year, reflecting growing confidence in digital assets. Despite the recent price surge, only 36% of the Bitcoin supply has moved in the last six months.
Like stocks, Bitcoin has a maximum of 10 trading days per day dictating a significant portion of its profits. During the bull market in 2017, BTC prices rose astonishing 1,136% over the top 10 trading days of the year.
Meanwhile, some entrepreneurs have tried to apply innovation to artificial intelligence and machine learning to help traders manage their emotions. Investors *FOMO An example is’Stock Cards’, a browser extension created to predict and prevent panic attacks and panics. ( *Fear of Missing Out)
With the bitcoin rally in 2021 known to have produced thousands of BTC millionaires, Bitcoin’s long-term investors are reaping the rewards of the HODL strategy.