A portfolio strategy for you?
How a well thought out, overall portfolio strategy helps me decide when to buy and sell…
Like most newcomers to crypto, I have a habit of jumping into bed with any project that takes my fancy. This results in a wild and disorganised selection of holdings. With the recent bull run of 2021, I was no longer sitting on spare change. It was time to change and implement proper portfolio management.
In doing so, I have fallen upon an unexpected advantage… when to buy and sell! Instead of random decision making, each trade has a reason behind it. For example, I didn’t hesitate to sell off some of my Nexo to cash/stable coin. The decision was made easy because I was top-heavy in Nexo and light on cash (waiting for the next bottom:)), according to my strategy percentages.
I recommend anyone to adopt a similar framework — it will lighten your mood considerably, I promise you :)
I had top heavy coins, too many funds on one platform and some were earning yield, others were sitting idle.
If a platform was hacked or went down, or a particular crypto tanked, my risks were not adequately balanced.
My strategy was as follows…
- All holdings to be earning some sort of interest/yield. *(This is important because I now view crypto in the same vein as Property — Invest for income rather than speculation, if the capital value increases significantly then that’s a bonus. )
- Sort holdings into low, medium and high risk i.e. Tiers 1–3
- Assign acceptable percentages to each tier
- Within each tier, assign a maximum % for any given coin/token/platform
Tier 1 = Staking Wallets, Major audited CeFi, such as Nexo, Celsius, Swissborg, BlockFi
Tier 2 = Well established, audited DeFi, such as Pancake Swap, Auto, Beefy
Tier 3 = Up and coming, peer reviewed, audited, such as Alpaca — Must have exceptional risk/reward
Launchpads = Such as PAID network, Oxbull.Tech, Polkastarter etc.
Assigned strategy percentages…
50% in Tier 1 secure holdings
20% in Vanilla farms (Tier 2)
20% in more aggressive Tier 3 farms
5% in Launchpad platforms & IDo’s — looking for the next x100 — fun money :)
But limited to…
Within Tier 1, max. 33% on any given platform.
Within Tier 2, max. 20% on any given platform.
Within Tier 3, max. 10% on any given platform.
You’ll notice that the higher the risk, the lower the amount for any one project/platform. This also has the benefit of helping decide how much to put into that ‘moon shot’ shit coin.
That’s me, what would you do differently/the same?
If you’d like to see my actual coin/token holdings…https://fineres.medium.com/my-portfolio-holdings-a923335aa6c5