How to build your first crypto portfolio?
Let's go through the following points:
• Mistakes when building a portfolio
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Most people do not know how to create a portfolio for cryptocurrencies. They are too aggressive and end up losing everything. Or hey play too safe and leave $ on the table.
Portfolio Goals
There is no perfect portfolio. I'm going to give some theory + examples and you should think about what works for YOU.
Creation of a team
Building a portfolio is like building a sports team. Imagine if your team had only goalkeepers - too much defense and no offense! Each position in your portfolio has a role to play. Some defend (stablecoins) and slaughter (higher risk).
The role of each class:
Stablecoins: Store capital and serve as patrons for buying bottoms.
Blue chips: Long-term growth. Long term hold.
High Risk: 10-100 X game. Make sure you take profits.
Let's look at portfolio examples:
For those who want to get acquainted with cryptocurrencies, but do not want to go down the rabbit hole.
2) Barbell Strategy
You use the extreme points of the risk curve, avoiding the middle.
3) 50/25/25
- 50% BTC (or replace with ETH)
This is a secure portfolio. It is more or less secure and at the same time gives you enough wiggle room to get your portion of shitcoins.
4) Bitcoin maximalist
- 100% in Bitcoin and don't consider anything else.
5) The Crypstack
It's hard to create a portfolio for everyone, but here's my version.
- L1 Altcoins are the best in terms of risk/reward ratio at the moment. Choose what you like. I like SOLANA and LINK.
- BTC and ETH are your safe havens.
- There will be enough % left for trading.
Mistakes when building a portfolio
Here are some of the most common mistakes that cut profits:
1) Most people are too aggressive
I have seen many portfolios of cryptocurrencies and the most common mistake is that people are too aggressive.
- Survival bias. You hear about the guy who turned $5,000 into $5 million and you think you can do the same.
- Dunning-Kruger. You think you know more about DeFi than you really do.
- Lack of patience. You are not satisfied with life and want to quickly escape from it. This forces you to do risky things like using leverage or too many shiеcoins.
- FOMO. Your favorite authority says that the coin will rise 100 times. And you fall into FOMO. There is no more money, so you are selling blue chips for shit coins.
Come up with a plan and stick to it.
2) Your portfolio is too diversified
Variety is good, but there is a limit to everything. It's hard to stay on top of all these projects. Also, you don't get as much benefit if the coin flies to the moon.
3) Do not rebalance
Rebalancing means buying and selling assets to maintain the distribution percentage. Imagine your shitcoin has skyrocketed to 20% of your portfolio. The goal is no more than ~5%. You need to take profits and rebalance before it's too late.
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