Here’s what I think makes a great portfolio. Firstly, there should be a clear binary objective. De-Risking and Diversification. This will allow you the best opportunity to ride out the brutal storms in the Crypto Seas and at the same time, prosper when the Trade Winds blast.
Panic sellers usually exit upon the earliest sign of what they think is a correction or jump on board because of FOMO (Fear Of Missing Out).
CASH is King...
Yes, surprise, surprise. The old FIAT... “dough”, "dosh", "notes", "doot", "coin", "folding stuff", "lolly", "moola/moolah" and any other name you can use for it, is very important.
Why you may ask?
Many ‘junior burger’ investors in Crypto spend all of their funds allocated on buying Crypto. Unfortunately, what this does is limits your ability to ‘pounce like a tiger’ on opportunities when there is a dip. And let’s face it, most of us have experienced that awful feeling; when you know a great buy is on offer but you are fully vested in the market. In other words, robbing Paul to pay Peter.
Having made these same mistakes, I now have a rule: Always keep 10-20% in FIAT. However, when the inevitable dip strikes, the temptation is present to go out and ‘spend’ all the FIAT on hand on these ‘bargains’. This is where discipline comes in. You need to ensure that if you deplete the cash, you replace it. That means selling off something that has performed well. You simply harvest from the Crypto that has performed and allocate it to something that is undervalued. It feels counter intuitive but if you do this consistently, you will be shocked what a positive outcome this will have on your Portfolio over time. Besides, many a time I have been able to buy back the ‘winner’ at a heavy discount to boot!
Here is a sample portfolio that I believe is balanced and has the flexibility with FIAT to allow you to pounce on opportunities. Now you can replace any of the ALT’s with your own suggestions. The percentages maybe tweaked as you wish. What I believe this sample portfolio provides is a structure and a solid cash component.
20% Bitcoin (BTC)
10% Ethereum (ETH)
15% EOS (EOS)
10% Bitshares (BTS)
10% Steem (STEEM)
5% Steem Dollars (SBD)
5% NEO (NEO)
5% Litecoin (LTC)
5% DASH
15% CASH (USD or equivalent FIAT)
This portfolio has a composition that allows exposure to Bitcoin, ETH, EOS, BTS, LTC and DASH; a combination of stalwarts and crypto with longevity.
The 10% and at times as high as 20% FIAT position is invaluable during corrections because it will empower you. When sitting on a healthy percentage of cash, one has the confidence to buy the dips and know once the original up trend occurs, awesome profits will be made.
Needless to say, one also needs to be brutal when managing their portfolio. Stay away from greed and FOMO. Once you do that and have your clear intentions implemented via your strategy, one can take on those treacherous storms with much more confidence.
I would love to hear other opinions on my suggestions above. Clearly there is no cast iron manner in which to manage your Crypto Portfolio and I do hope the above suggestions offer some insights.
Happy investing.
Love, love, love
***Remember: DYOR - Do Your Own Research. This information is meant for entertainment purposes only. An
author who spends free time gaming, is akin to listening to Homer Simpson for advice.