Bitcoin Forum

Let's some talk about Assets or Protfolio Management.

In the same way that a farmer cares for the seeds of the crop properly in order to get a good yield before producing the crop, we have to use our investment or capital properly. Otherwise, as the crop will not be good, your capital will continue to decrease, which will affect you a lot emotionally, so it is better to know the correct rules of sowing seeds in advance.
Otherwise the dream will remain a dream ,,,
Just keep dreaming ,,,,


So when it comes to trading in cryptocurrencies, you need to know the rules for the proper use of your capital.
Think,
You have 300$, you divide this 300$ into 3 equal parts (this is just an example),
1st part = 100$
2nd share = 100$
3rd share = 100$
Total 300$

The rest is history you know......😁

First thing first, the spelling Portfolio and not "protfolio". Not sorry for being a grammar nazi ;)

Second considering cryptocurrencies to be one sector as per popular demand and not what I prefer, this approach can be used for managing different coins. However my experience has shown me that investing in altcoins is a waste of time and money, however big or small it might be. Thus if you want crypto in your portfolio, keep a 100% Bitcoin, the long term value is way better than any altcoin.

Next to manage the portfolio add in more sectors different from crypto, like stocks, commodities, bonds, metals. Do not try to put in more money into altcoins, but into sectors that have been known since centuries to give returns. Although some people may disagree, risk management is better done in this manner.

i'm not sure if you could call it a portfolio if you only have BTC on your investment. it has to have more of it, there has to be something else apart from BTC such as ETH. anyone who is in crypto i guess know this token i suppose.

choosing which one to pick isn't easy which is why there is the need for an investor to wisely do the research first or it will affect emotionally i believe that.

As I can see you'd divided your capital into 3 parts which are a good idea. Here I can say that doesn't put your egg in one basket, because as you can see the growing number of cryptocurrencies available in the market today, traders probably struggle how to properly manage their portfolio investing those cryptocurrencies in the market. However, to make it easier for them to monitor they used tools and it might be helpful for us to easily manage our portfolio. Just like Blockfolio, CoinMarketCap and etc.

I still believed that there are safe haven for your investments in the crypto sphere those coins that belong on top 10 in coinmarketcap.

It's all about timing. Altcoins offer opportunities for astronomical returns but they require a multi-year, big picture mindset. I ignore the altcoin market for years at a time but in the next BTC bubble, you bet your ass I'll have a portfolio full of them.

During bubbles, money flow cycles back and forth between the BTC and alt markets, similar to stock market sector rotation, (https://www.investopedia.com/articles/trading/05/020305.asp) so it becomes more profitable to trade ALT/BTC pairs and leave the fiat markets alone.

Longer term, I hate holding them. Nothing worse than 2+ years of crippling drawdowns.

Investing in a coin that isn't certain for an increase when others are can be tiring. This is the reason I would prefer to invest in coins in top 20 in cmc. These coins like etheruem can really give you hope. They are usually traded in almost all important exchanges which is a very important when researching for a coin to buy. Putting money in a coin just listed in one exchange might not really be a good decision.

You can't have a real portfolio with cryptocurrencies.The altcoin prices usually follow the Bitcoin price so there's no diversification of the overall risk.Real portfolios contain assets that don't correlate in terms of market price-Stocks of companies in different industries,bonds,real estate,fiat currencies,etc.
If you buy 20 altcoins and their prices drop at the same time,than what's the point of such "portfolio"?
The wealthiest people on earth usually don't have portfolios at the beginning and they actually had to "put all eggs in one basket".Look at Jeff Bezos,Bill Gates or Elon Musk.Did they managed their portfolios at the start of their business?Nope,I don't think so.

From those 3 parts, you can use the first part, and split it again into 2 parts so you can use it for trade. The other parts will be for the backup part just in case if the price is suddenly drop too deep so you will have a chance to buy more amount with one of the parts. We should minimize the risk by using the money that we can afford to lose, so if the bad things happen, we still have more money to recover from bad situations.

But it is no problem if you still use that 3 parts to trade if you think that you can use it for buying 3 coins. But that will be confusing to manage 3 coins at the same time, and if you are not familiar with managing more than 1 coins, you can be late to do something related to the current situation on the market. So be careful to choose what you will do.

First of all, I want to log in by stating that the word "Portfolio" is misspelled in the title. Then I would like to add a few things about portfolio management. First of all, portfolio management is not to trade by dividing your existing capital equally. Portfolio management is to create a basket that is balanced with different investment tools and close to risk factor (beta) 1. In other words, by making only a few different cryptocurrencies, we are creating an investment portfolio, not an investment portfolio. If the preferred investment tools are different and the beta rate is equal to or close to 1, then we can talk about portfolio management. In other words, what you are talking about is actually basket management, what you misspelled and what I briefly gave information about is portfolio management.

It doesn't need to be a trader to have a portfolio, a holder could have some coins they hold. This is what I got in a wallet I have installed. Something like this when I check all my assets inside it. Not entirely something that I manage it but Just sort of a graphic summary. 

https://i.imgur.com/hcnZtwI.png

I take out the other one because it's not something worth showing because I might appear like shilling for it.  ;D

Diversification has been something like that for a long time but people haven't realized what kind of diversification they could do because bitcoin and ethereum are not so much different for example. Let's say you put 1/3 of your money into bitcoin and 1/3 of it to ethereum, when they increase or decrease they basically do it together; which is why it is hardly ever diversification.

When the big investors of the old times talk about the diversification they are not talking about putting your money into different ways of the same thing, they talk about putting your money into totally different stuff. For example this all started with stock investors who said investing into different stuff is better, which wasn't buying different stocks, it was buying real estate, gold, commodities and many different things, so that if stock market crashes you still have some money.

Diversification is always a better choice or thing to be done rather than going all in a on single yet we know the chances of recovery
would really be there since we can still pull out in case of dumps or unfortunate events compared if you do have one then it will
surely put you up into a big problem.I do love the diversification above which shows on image where USDT is included where
this part of port is really intended for buying opportunities.

That was just a common typo haha
I have to disagree with this, as for my personal experiences giving 100% to a single coin (bitcoin obviously) is not going to be that beneficial why? because you are only expecting a profit from a single investment on which is very uncertain and volatile. Yes there are tons of shitcoins in the market but you can easily distinguish those coins with the market element. Diversification is better coz you'll get a wide range of possibilities. I know we all agree that the highest percentage of our investment should be put in bitcoin.
You may not try to look at stocks right now coz it is down, we don't know until when. Best if you have some strong altcoins though like LTC, XRP and ETH. ZRX have shown an act recently so maybe we should all look into it.

this is generally a bad advice to give in the cryptocurrency market. because diversification only works when the assets you are buying are first and foremost safe and free of (or have very little) manipulation. and second important thing is that their price shouldn't be linked to something else. both of these obviously don't exist in the altcoin market. every altcoin is considered extremely risky as they are heavily manipulated and also they are all being affected by bitcoin's price.
this means when you split your money (the $300 example) you are just losing more money in different places instead of in one place. not to mention that it makes dumping extremely difficult as altcoins dump with a very fast speed as the pump and dumpers sell, having more than one altcoin makes it nearly impossible to react to such inevitable dumps.

You can take a break from putting money into anything at this point too. ;)

Nope, because investing in altcoins does not have similar returns as per investing the same in bitcoin. I stand with this ideology because altcoins have always "followed" when bitcoin has shown rise without having any organic growth of its own.

Take LTC for example. Have you see any growth in it coming from real development in their mode of transaction, scaling or merchant acceptance? The last pump I saw leaving out the Q4 2017 pump was the point when LTC halving happened.

Take ETH, which was created to be something new with its dApps. Although its founder seems to be optimistic about DeFi, there has not been any development on ETH at all in the last 2years that is groundbreaking or even worth discussing.

Dont even talk about XRP, hate to say this but ripple is a centralized coin and this goes against the basic principles of cryptocurrency. There are people who are controlling it and if you are fine with that then its ok.

Try putting in money into altcoins at this time and same amount in bitcoin, considering you actually sell at the pump only then you will get some profits off the books but good luck doing so.

I have a different way of managing capital than you. I am a long-term investor and focus only on Bitcoin. for other alts I don't care because Bitcoin is the market controller. so I put my money in bitcoin and determined the prices that I could buy and hold for a long time. Whenever bitcoin has a strong dump of about 5 - 8%, I will deduct about 15% of the budget to buy bitcoin. that is my trading strategy and how I manage my capital.

Even I am also a true bitcoin believer, I'm focusing on other altcoins as well because one of the basic principle of investment is diversification. To minimize your risk, you must need to go for diversification. I am believing into bitcoins with more than 90% of my capital and for the rest of 10% and taking risk with few altcoins to get more number of bitcoins in future. I mean I'm not investing into altcoins for gaining more fiats but for making one number of bitcoins. I am calculating all my altcoins' profit-loss ratio only in BTC values are not in USD unlike most traders are doing.

A good portfolio management must include all the basic principles of investments. When you're failing with at least one rule, then you cannot be a successful investor. At the same time I believe we do not need to deviate from our early goals. I mean even you are believing only into bitcoins, you can invest into other coins for the reason of gaining more number of bitcoins like I'm doing.

Both of you are sort of right and sort of wrong at the same time. Yes, putting all your money into bitcoin would work if you also have money somewhere else, so if you have money at bitcoin, but also have some gold and some stocks that means you are fine, that is a good idea and I think a good diversification as well, but if you only have bitcoin that is not good enough at all, you should have some alts.

If you want to put your money into bitcoin AND some alts, that is not enough neither, because when bitcoin goes down almost all alts go down as well, and if it bitcoin goes up almost all coins go up as well, there is rarely any difference, it is not enough at all, yet it is at least bare bottom what you can do, better than only having just bitcoin because that is riskier.

^ That is absolutely correct better to have your investment not only in one for better security so if one will fail then you still have other altcoins the can make you survive in the crypto world. Normally when bitcoins dump other altcoins dump as well but that doesn't mean that it will all crash at the same time and will leave you nothing. Since bitcoin has proven its capability to survive in difficult time might as well have a bigger amount in bitcoin first before other altcoins, you may also try to consider as well other investment aside from crypto, like golds and other valuable things that has set a good investment for years, decades or even centuries. Nevertheless, managing portfolio is always good in trading and investing.

The type of trade that you do is the type of Longterm that is specifically for Bitcoin. Unlike the type of trading carried out by the OP which separates funds for several parts, as management of funds when trading. Good management will make it easy to trade and have a good backup when the market is not good.

Longterm, MidTerm or ShortTerm trading types can all produce as long as they remain at their original destination and do not deviate and Management is done well.

I think diversifying with alts is riskier than just holding some bitcoin. If bitcoin got bearish, say, got -10% a day, most alts would suffer more than that, and it might take a while for them to recover. Prolly longer than bitcoin to recover itself. You'd better hold bitcoin only if you want to avoid the risk and only go that way if you want to 'gamble' with some alts, hoping they could net you 2-3x in the next few months.

A better diversification would be crypto and other assets if the target is avoiding risk with moderate gains as the target.

When the farmer has also observed that some parts of the land are more fertile than other parts, he tends to sow more on the fertile part.  In other words its best to invest more in promising coins.

You have quite a good example impressive comparing it to farmers and seed  ;D That is a common newbie mistake to invest in bad seed, I was once in that situation before, I keep holding it I was hoping it will bounce back until it reaches no value at all. What a big mistake, regrets, and disappointment. But I consider it as a lesson now I only select few coins it is not necessary to divide your asset you can invest in one asset like bitcoin it is the safest investment in cryptocurrency.