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The financial services industry has endured a tumultuous decade, with the financial crisis and subsequent fallout taking their toll. Financial institutions are facing harsh market conditions among a number of other challenges.
The stock market is facing a general downturn, particularly in tech stocks. That was already having knock-on effects on the crypto markets. Central banks are hiking benchmark rates and selling assets they acquired over the past two years, leading other investors to sell riskier assets like crypto.
The cryptocurrency market and the stock market have been incredibly volatile in recent months. This has created a difficult environment for fintech companies. However, there are a few ways that Digital Life bank tends to survive the tough market conditions.
At Digital Life Bank we diversify our portfolio to reduce financial loss, diversification is the most important component of reaching long-range financial goals while minimising risk. Diversification reduces risk by investing in vehicles that span different financial instruments, industries, and other categories. By diversifying, Digital Life Bank makes sure that we don’t put all your eggs in one basket.
Digital Life also does continuous investing, we make volatility our friend using a systematic investment plan. With every dip in the market, the systematic investment plan garners more units for us. A systematic investment plan (SIP) is a plan which DLB uses to make regular, equal payments into a mutual fund, trading account, or retirement account such as a 401(k). SIPs enable us to save regularly with a smaller amount of money while benefiting from the long-term advantages of dollar-cost averaging (DCA).
Digital Life bank also survives harsh market conditions by tracking volatility. We rely mainly on a variety of different indicators to track volatility and to determine optimal exit or entry points for trades. Market volatility goes through cycles of highs and lows. Here at DLB, our analysts watch the direction of market movement and know when there is a sharp increase in volatility as a possible indication of a future market trend.
A lot of people ask ” Is it possible to profit from volatility or harsh market conditions? The short answer is “yes.” There are various ways in which Digital Life Bank can profit from volatility. DLB utilises various levels of leverage, further expanding its exposure to volatile assets and obtaining more profit.
DLB also shares their profits with shareholders and investors through a small dividend yield annually, a bit like us paying interest to savings account holders. While dividends aren’t guaranteed, and they can change, Digital Life bank’s sharing of dividends tends to be more mature and make our share prices less volatile. Therefore as long as the dividend is paid out, there are always some gains. This means dividend investing is a smart move during market downturns when share prices and returns may otherwise be falling.
Digital Life Bank also intends to try the Ride the sector rotation method. This is a strategy for dealing with market downturns. It is simply moving money and other digital assets from one stock market sector to another. During times of high growth, for instance, tech stocks seem to do well. When the economy slows, meanwhile, “boring” sectors like utility stocks tend to hold up better. So if you strategically move from one to the other, you may avoid large dips in one particular sector.
To maintain solid returns during the harsh market condition, Digital Life Bank seeks to purchase diversified index funds, which will do well no matter which way a particular sector goes. Finally, DLB is known to trade mainly on low-risk digital assets, thereby reducing the risk and ensuring that all our investors and clients yield maximum profits.
