When all my friends ran to buy crypto, I tiptoed. I benefited in 5 ways from ignoring the trends.

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• All of my friends got on the bandwagon when cryptocurrency trading exploded in 2020, but I paused.
• I kept my portfolio diversified and did a ton of research and observation before wading into crypto.
• By not following my friends' advice, I avoided a lot of losses on things like meme coins.

When I started investing in stocks and cryptocurrencies, I made a promise to myself that I wouldn't give in to peer pressure from friends, social media, or commentary in the news. I had spent years making mistakes with my money, and after working hard to clean up my finances and stick to a strict budget, I wanted to ease into the world of investing by researching and strategizing first. 

Because I didn't rush to invest in every new crypto of the week, I was not only able to stay focused on more holistic goals, like retirement savings, making passive income, and managing my spending, but I also believe I really benefited from ignoring the hype.

Here are five ways I came out as a winner by ignoring these trends.

1. I did a lot of research first

A lot of my friends rushed to buy meme coins — like dogecoin or shiba inu — when they went viral in both the news and on crypto forums in 2020. Some made short-term profits by buying the coins at a low price and selling them as the price skyrocketed, but others held on too long and ended up losing quite a bit.

While meme coins seemed to be getting a lot of viral attention over the past year, I decided not to give in to the hype — even if I could have made a profit. Since I'm new to this, I couldn't justify the risk of buying these meme coins since I didn't know much about them or what their purpose was. 

If I had listened to my friends and bought dogecoin when they did, I would have lost money.

2. I bought bitcoin during a dip

A lot of my friends bought more popular cryptocurrencies at their all-time highs. There was a lot of pressure to buy bitcoin when it shot up in value and was worth over $60,000 per coin in April. After doing some research and trusting my gut, though, I decided not to buy it then. 

I finally invested when bitcoin fell to around $40,000 per coin. As a rookie investor, I try to always remember to buy during a dip and not when prices are skyrocketing — even if it seems like the price is only going to increase.

3. I invested in multiple coins

A lot of my friends have a strategy of going all in on one cryptocurrency. I decided that since there's still a lot of news, changes, and growth in the cryptocurrency space, I was not going to follow their strategy. Instead, I would hold anywhere between three to five coins at once based on what I felt would increase over time. 

While it's hard to compare who has the better strategy because we're all approaching this with a long-term lens, I believe this helps me manage risk and it eases my anxiety as an investor. I don't feel like I have to micromanage my crypto portfolio daily in fear of suffering major losses if one coin takes a dive. 

4. I made gains elsewhere

While a lot of my friends pulled most of their cash out of the stock market and invested it in crypto, I decided to keep my investments diversified in mutual funds and other investments. This helped me not only manage risk, but also benefit from certain stocks hitting all-time highs.

If I listened to my friends, I'd only be able to make gains from buying cryptocurrency. That's not something I want to rely on, as I am an investor who is aiming to have a more holistic financial approach. 

5. I watched and learned from other people's mistakes

I was able to learn a lot by watching my friends who started earlier than I did. Some of my friends have been buying crypto for years. 

I started in the middle of 2020, so I was able to ask them questions, view their portfolios, and learn from their mistakes, like buying too high, selling too quickly, or putting too much cash into meme stocks that crashed.

This article was originally published in November 2021.