Fundamentals of building and maintaining your crypto portfolio

[randomhumster]

Honestly I am not very good at trading, have tried several times but still got stuck. For the time being I am just a long-term holder, 75% of my assets are in popular coins and 25% I invested in my favorite alt and also ico. I'd rather be a holder, than I just follow the trend of investing and trading following a signal or trading group.

So you have Conservative or a moderate portfolio. I guess on the current market it is the best availlable option. Can you tell us, if this percentage was planned or you've been investing on projects you like and randomly ended up with this portfolio?

How many people here actually plan the portfolio? And how many just invest in projects and don't plan the protfolio itself?

[randomhumster]

As promissed, the second part is published: https://steemit.com/cryptocurrency/@cryptohumster/the-fundamentals-of-a-crypto-investment-portfolio-rebalancing

Rebalancing basis
Rebalancing your crypto portfolio is one of the most important aspect of portfolio management. It allows your portfolio to survive market deep, adopt to market condition, mitigate risk and optimize your profits. So what should you know about rebalancing?

There are two main rules:
 - Rebalancing is always based on investment horizon
 - Rebalancing is always made according to a pre-conceived scenario

I don’t need to explain why you need to consider investment horizon. It is easy to understand that if you invest for year you don’t need to rebalance your portfolio every day. You need to consider rebalancing once a month or once in 3 weeks.

As for the plan, there are two main strategies:
- Preservation of the current percentage of different asset groups (or for each risk level individually). For example, if you have moderate portfolio with 25%/50%/25% percentage, you may need to buy/sell assets to until the original proportion is restored.
 - Changing shares. Some of your assets perform better than the others. You may want to increase the share of the most profitable assets and get rid of assets, bringing only losses. This operation will make your portfolio more profitable.

You need to decide what to do with a positive imbalance after rebalancing. You can either fix your profit, leave it as part of portfolio or reinvest.

The frequency of rebalancing depends on the following factors:
 - Investment horizon. For long-term portfolios (from a quarter to a year or more), it makes sense to conduct this operation once a month. For medium-term - once a week.
 - Sharp change in the proportions. For example, there was a portfolio with a balance of assets of 50/50, and after a while, it became 60/40. Such a significant change in the structure usually requires a rebalancing.
 - Individual news background for each asset. For example, if there are positive rumors on a coin you may consider investing more and sell when the news come out. Remember, we always buy the rumors and sell the news.

In general, I will not recommend diversifying portfolio too much as it will be difficult to rebalance portfolio.