BTC Portfolio Diversification

[Bartello]

Hi All,

I'm new to this forum, and investments in general, and have recently received excellent suggestions to get me started, but was wondering how you all diversify your portfolios? To add some context, here is the link to my first post here https://bitcointalk.org/index.php?topic=5476808.0.

I have been browsing through the investment sections on the eToro app and have been looking through the "copy traders"  to see what investors that have high percentage of returns are doing, but I don't just want to click buttons and follow blindly, but want to be able to understand not only what I'm doing and why, but, the pro's and con's of each area of investments and the advantages of diversifying with them.

The money I have left over each week ranges between 50-70% of my net income, of which I currently allocate 50/50 between the below -

• Bank Account savings at 4.75% AER/Gross variable interest (paid daily)
• Purchasing BTC using DCA approach

So far, I've looked at the below options on eToro for diversifying my portfolio -

• ETH
• Various other altcoins
• Commodities - Such as SPDR Gold
• ETFs - Such as SPDR S&P 500

Sorry if this is has been posted in the wrong section.

[WhyFhy]

I couldn't chime in on the DCA/ETF stuff but will say that majority of alt coins are trash.
Treat Bitcoin in a higher regard than gold if youve embraced crypto this won't be hard to do.
Treat Eth as silver.
Consider everything else copper. Or a means to get more gold and silver.
I'm all for diversification , but some Alts are really worthless with high value... Or really useful to never really take off.
Looking at BTC from 4-5 year viewpoints , does your 4-5% apy still matter?

[Bartello]

Looking at BTC from 4-5 year viewpoints , does your 4-5% apy still matter?

Thanks for the reply. I don't think I understand your question, but if it relates to the gains of each over the same time frame, then the only reason I'm allocating at 50 / 50 is because I don't intend on withdrawing anything from my BTC investment over the short term and view this as a mid-long term, as opposed to my bank savings which are short-mid term where I will only touch them in emergencies etc, but maybe somewhere down the line I will increase my BTC weekly investment once I'm satisfied with the amount in my savings + I guess I always have an option to purchased in bulk should the price permit.

[un_rank]

So far, I've looked at the below options on eToro for diversifying my portfolio -

Are you looking primarily to diversify through the eToro platform, or you are interested in any investment option which is available?

• ETH
• Various other altcoins
• Commodities - Such as SPDR Gold
• ETFs - Such as SPDR S&P 500

For Crypto, I will keep it tidy and stick entirely with Bitcoin. The bull market is coming and there is the possibility that several altcoins will go to the moon and back down, but I will only touch them with a long stick or not at all. Do your research but always keep in mind what you want from an investment and do not invest cause there is an available option.

- Jay -

[franky1]

lets look at the shares industry
after researching which companies have not recently diluted shares or had any financial troubles and are sustainable to last, where you like the companies and think they have potential via the research you done into their business plan

chart all possible investments out to their last 5 years performances

then using their 5 year low and 5 year ATH.... rate the position the price is now using traffic light system
for instance. on shares. i looked at vodafone, lloyds and prudential (for this demo all three randomly picked, not researched or suggested)



green buy, yellow hold red sell

the more green they are the more you invest into them. as oppose to how much you would if they were yellowing

you can set numeric values for the colour

yellow 0 dark green 30
add the numbers up to get a total

EG 25 28 0 (image: top mid bottom)
totalling 53
then do percentage math
100/53*25= 47% of your amount you want to invest in shares into top image
100/53*28= 53% of your amount you want to invest in shares into middle image

basically you are budgeting "buy low, sell high"

[mk4]

I don't suggest following those traders. What you do, is do a lot of reading and make decisions yourself. Those copy-traders have the reputation of doing really well in a shorter timespan(1-2 years) but get totally rekt in the longer term.

[Wind_FURY]

The money I have left over each week ranges between 50-70% of my net income, of which I currently allocate 50/50 between the below -

• Bank Account savings at 4.75% AER/Gross variable interest (paid daily)
• Purchasing BTC using DCA approach

So far, I've looked at the below options on eToro for diversifying my portfolio -

• ETH
• Various other altcoins
• Commodities - Such as SPDR Gold
• ETFs - Such as SPDR S&P 500

Sorry if this is has been posted in the wrong section.

In my personal opinion, don't diversify so much that you'll be spreading your capital too thinly, making you have meager profit. We don't need to diversify like a billionaire asset manager because we don't have their billions in capital.

Use your limited capital more efficiently, and put them in one or two of your most confident investments. The smaller the capital, your risk acceptance should also go higher.

[KiaKia]

Altcoins are always trash even though it's where real money can be made at times, if you are smart you can make money from alts but know that they are all high risks investment, I won't advice against diversification, because I myself I am investing in alts and I am up x10 on few projects already, that's more than what I make from my Bitcoin portfolio.

For a beginner it's better to just invest on Bitcoin to avoid some stories that are not so good, because it takes extra efforts to know how to invest in other alternative digital currencies, you can still do pretty well in Bitcoin only.

The truth is having Bitcoin only is more than enough, you don't have to diversify in anything, I believe that only altcoin investors should take diversification very seriously, because you can't buy one alt and rely on it like Bitcoin, you need more than one, but with Bitcoin, you are good.

[Bartello]

lets look at the shares industry
after researching which companies have not recently diluted shares or had any financial troubles and are sustainable to last, where you like the companies and think they have potential via the research you done into their business plan

chart all possible investments out to their last 5 years performances

then using their 5 year low and 5 year ATH.... rate the position the price is now using traffic light system
for instance. on shares. i looked at vodafone, lloyds and prudential (for this demo all three randomly picked, not researched or suggested)

https://talkimg.com/images/2023/12/09/EAth1.png

green buy, yellow hold red sell

the more green they are the more you invest into them. as oppose to how much you would if they were yellowing

you can set numeric values for the colour

yellow 0 dark green 30
add the numbers up to get a total

EG 25 28 0 (image: top mid bottom)
totalling 53
then do percentage math
100/53*25= 47% of your amount you want to invest in shares into top image
100/53*28= 53% of your amount you want to invest in shares into middle image

basically you are budgeting "buy low, sell high"

Wow, thanks for taking the time to explain this to me. I just think I need to keep things simple for now until I educate myself over time, but just been about diversifying so thought I'd ask here as these articles can often have misleading information.

[Bartello]

I don't suggest following those traders. What you do, is do a lot of reading and make decisions yourself. Those copy-traders have the reputation of doing really well in a shorter timespan(1-2 years) but get totally rekt in the longer term.

I totally agree, as that % of gains is from the sample size on that site I guess, and who knows what else they're investing in elsewhere? So I imagine it's not a true reflection on their abilities.

I sold my alts a few weeks back in which i read about a lot on articles online to turn the money into ETH and later sold that to purchase only BTC, but as luck would have it most of the alts i sold are increasing in value, but I didn't look at that in a result orientated way as they could have just as easily plummeted, and I am confident that my decision to put a nice sum each week into BTC will pay off in the long run. As a beginner, I think I was initially put off purchasing BTC because of the price of a single unit vs the £100 or so each week I'd be investing - I thought it wasn't worthwhile at the time.

[franky1]

when you are invested and the price has risen when you are going to sell. decide how much you want to sell based on how much the rise is*. and then put that amount into something else whilst you wait for the correction

EG if a chart is in the red and your selling dont buy back into the red to stay in that stock/share/asset. diversify into other solid investments(sustainable projects/longevity tested/undiluted) that are in the green.
take profits from the others while you wait for your prefered investment to get back into its new green zone post its new ATH

right now.. bitcoin has alot more potential for a rise in next couple years compared to Eth.. so id be more solid in BTC for now.
Eth is being artificially held up by shadow trading/arbitraging/following bitcoin movements. its underlying PoS mint cost is super low(below $100/coin) so eth market price is speculatively high in comparison to bitcoins underlying mining value which is above $25k so bitcoin has better store of value and support and not as speculated

i wont over complicate the research, but research all investments true underlying operating costs and value
and if they are speculating too much of a premium against value dont include it in your list of potential investments

..
*dont be extreme to "buy all", "sell all".. .. instead scale how much you invest of divest. set a scale of how much you put in or take out based on market performance.

[Solosanz]

• Bank Account savings at 4.75% AER/Gross variable interest (paid daily)
• Purchasing BTC using DCA approach

• ETH
• Various other altcoins
• Commodities - Such as SPDR Gold
• ETFs - Such as SPDR S&P 500

Saving in banks, can't say too much if you're still trust in banks.

DCA-ing Bitcoin, this is the best choice since Bitcoin is good for long term, so you will not regret as long as you can hold.

Buy ETH or altcoins, this is terrible, these coins are mostly pump and dump which is related to gambling.

SPDR Gold isn't a real gold, it's just an IOUs, better to buy the physical gold and store it by yourself.

Stock, another good option as long as you can trust the project.

[moneystery]

from what i saw in the thread you have £300 - £400 left over each week from your salary right? if you ask me, i'll probably stick it all to bitcoin and have no intention of diversifying. £300 is not a lot of money, but it's not too little either, so when you buy it all in bitcoin i think you can make a decent profit before the halving.

i'm not saying that the dca or diversification method is not good, it's good to invest regularly with this method, but opportunities like now don't come twice, so when the opportunity arises, take advantage of it to buy as much as possible, and be sure that you can make big profits from this investment.

[Dr.Bitcoin_Strange]

OP, just like someone already mentioned here, not every altcoin is worth investing in. You might be investing in an altcoin that you think might become very profitable in the future, but you can get disappointed and not earn any profit from the token, or you could even run a loss. It's normally possible to diversify your investment by investing in other assets like bonds, gold, and real estate, but when it comes to cryptocurrency investment, I will only advise Bitcoin to be your priority. If you think you have enough money and you just want to try your luck with Altcoin, then you can buy a few and only invest the amount that will not affect you if your fund gets burned.

[WeThePe0ple]

This is not advice but I would like to hear some opinions about it.

Popular investment bankers in my country advise citizens to have enough money in the bank to cover at least 6 months of living expenses. This equates to roughly 12000 euros where I live.

It makes sense to diversify all other money that is available. In my case that is 55k. Mine is not diversified yet, but I wish to do so.
I've heard many economists say how they diversify their portfolio. Stocks, bonds, precious metals, real estate..
Most people diversify the majority of their portfolio in 10 different stocks. In my opinion this is not diversification. They just own stocks.

Keep in mind that Michael Burry, the man who predicted the 2008 financial crisis and became a billionaire because of it, recently dumped 90% of his stock portfolio because a tsunami worse than 2008 is upon us. It is worse, because debt vs GDP is much worse on a global scale. The growing amount of banks failing, is a warning sign of what Burry predicts. A global economic meltdown.

Personally I do not want to own anything that is priced in a debased currency that loses at least 7% of its value each year.
My intended investment portfolio is like this:

15k euros to cover 7-8 months of living expenses
20k euros in bitcoin
20k euros in gold
10k in silver
5k for my wife who is still building a savings account

I feel that I should be going higher in BTC, but I intend to grow that portfolio with DCA.

Meanwhile I pay cheap rent. I do not want a mortgage while the cost of living is rising nearly 10% per year.
It is so bad that many people I know personally have to default on their mortgage payments, and sell the property at a loss.

[Bartello]

So far, I've looked at the below options on eToro for diversifying my portfolio -

Are you looking primarily to diversify through the eToro platform, or you are interested in any investment option which is available?

• ETH
• Various other altcoins
• Commodities - Such as SPDR Gold
• ETFs - Such as SPDR S&P 500

For Crypto, I will keep it tidy and stick entirely with Bitcoin. The bull market is coming and there is the possibility that several altcoins will go to the moon and back down, but I will only touch them with a long stick or not at all. Do your research but always keep in mind what you want from an investment and do not invest cause there is an available option.

- Jay -

Thanks for taking the time to post in my thread. i started off with trying to diversify with a number of alts, but changed my strat as i thought the gains from some would make up for the losses of the others, which i guess wasn't a plausible enough reason to do what I planned in the first place, and seeing the alts that were favoured on the articles either have small gains or losses constantly was messing with my head to the point I was trying to jump on others to make up the losses which Is always going to be a losing battle isn't it?! I am much more confident and content with my bank savings and BTC but wanted to see if there were other areas I could invest my money into wisely.

Thanks again.

[Aanuoluwatofunmi]

So far, I've looked at the below options on eToro for diversifying my portfolio -

• ETH
• Various other altcoins
• Commodities - Such as SPDR Gold
• ETFs - Such as SPDR S&P 500

When it's comes to how we all secured and handled our investment portfolios, it may not have to be the same way others did their and run it, it has to be base on our personal convictions on what we want to invest, how much to invest and how long our Investment should also be, we can first make our personal decision on this to then later proceeds on other necessary prospect we see from what we are intending to invest on.

[franky1]

This is not advice but I would like to hear some opinions about it.

Popular investment bankers in my country advise citizens to have enough money in the bank to cover at least 6 months of living expenses. This equates to roughly 12000 euros where I live.

15k euros to cover 7-8 months of living expenses

there are reasons for different people advising different amounts

you only need 1-3months
if you are skilled, in a job that is secure(the business is doing well). you enjoy it, you know you can get another job easily if things turn bad.
(enough to cover emergencies/home appliance failures to avoid needing to touch the credit card)

you only need 3-6months
you are unsure, unhappy with job and there is a risk you can blow your lid and resign or get sacked and it might take a few months to get another job
(covers emergencies and a few months unemployment to avoid headache of delays of signing up to unemployment social security)

you need 6-12 months
if you have no skills and have bad work history and only able to grab crummy jobs with no security where the competition for applicants is high

[Asiska02]

This is not advice but I would like to hear some opinions about it.

Popular investment bankers in my country advise citizens to have enough money in the bank to cover at least 6 months of living expenses. This equates to roughly 12000 euros where I live.

That’s a big amount of money to have with you to cover for that expenses when you live in my country. When I checked for life expenses in Europe, that money don’t look like something that will last you for 6 months expenses, but that still depends on how you spend and willing to manage your expenses.

15k euros to cover 7-8 months of living expenses
20k euros in bitcoin
20k euros in gold
10k in silver
5k for my wife who is still building a savings account

I feel that I should be going higher in BTC, but I intend to grow that portfolio with DCA.

You have a good investment plan here but it will be better if the total money spent on gold and silver is not as much as that you spent totally on bitcoin. I have more confident in bitcoin investment than I have in gold and silver.

[franky1]

as for gold/silver.. they are in the orange-red range


gold is super red so not a good time to be buying
the rule of investing is to not buy the high
buy low sell high