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Intro

"Do your own research"

This is something that we hear over and over again in financial articles, mainly within articles highlighting a specific investment in order to shield the author from blame if they are completely wrong.

Well... How many of us do our own research to a degree that is actually impactful? If an "expert" in a field recommends doing something and you trust their opinion as fact, doing your own research may simply mean finding a few more articles that reinforce your confirmation bias as you look up something like "X price prediction 2025" and see it is supposed to go up.

A lot of people, myself in the past included, are happy to stop there and trust the opinion of others to make them money. Sometimes it does work out as we can assume that over half the material we read is honest and not trying to scam you, but then sometimes we see a Bitboy scenario where the author was paid to hype up the investment and then it gets dumped on you.

I think that it is an important reminder for the community to take a look at the facts of the situation before making any type of financial investment.

Too Little

By trusting the voice of experts to determine your money flow, whether through an official mutual fund or through taking a tip from an influencer, you lose much of your own agency and understanding of the investment.

I just saw an article come across my feed today about making sure you know what you are actually investing in, and as silly as it sounds, you really need to understand what you are buying to figure out how much to buy and what level of risk you are taking on.

One example of me not doing enough research goes back to that Bitboy dig I threw in the introduction. I watched a video that I was unaware was sponsored where Bitboy hyped up a token called MYX Network. After watching the video, I bought $200 of the token. I didn't buy because I understood anything at all about their protocol, I bought because I figured a few thousand other viewers would do the same and the price would pump. I believe I lost $198 on that trade... Not the best ROI.

I don't blame influencers from cashing in on their success. If I had thousands of people tuning into my videos I would do the same thing probably. What I wouldn't do though is completely mislead viewers. I think that one thing that every viewer needs to be aware of is what the technology or investment is actually seeking to accomplish and what the timeline is for that accomplishment to yield dividends on your investment. Hype-based investing is just gambling and sometimes you win big, but often you are the one getting dumped on as these influencers either filled their bags or their sponsors were planning a dump following increased traffic flow from the video.

We all need to be careful and watch for predatory "investment opportunities", it just takes some basic knowledge and thought on what you are getting involved with.

Too Much

I've recently been reading about the "analysis paralysis" where people will actually do too much research and then as a result be hesitant to take a risk. This is the other side of the coin. I don't think that there is an exact science to figuring out how much research to do before making an investment, but it is my personal opinion that once you have a solid understanding of the tech and the timeline, you can begin to assess how much of a risk you are willing to take on your position.

Takeaways

Though there is no exact way to do things, it is safe to say that you should be doing more than zero research and less than 7 days a week 365 staring at the prospectus of the investment.

If anyone has any tips on how much research they typically do on investments and what sources they consult, I would be interested in hearing it!

Good luck on whatever you decide to do today!

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Who I am:
My name is Rob and I am a financial analyst with interests in cryptocurrency and blockchain. I have enjoyed my time thus far engaging with Web 3.0 and am looking to continue learning more and sharing what I learn through my experience.