Planning your Portfolio

Once you have decided to take the plunge and start investing in Bitcoin and other crypto currencies, it can be a good idea to create a plan of your portfolio, i.e. decide what coins and programs you will invest in, so that you can achieve a balance between growth and stability.

One of the key points to consider when creating your plan is diversification. Diversification is the process of distributing your capital across a number of investments in order to safeguard against losing it all if one coin or program goes belly up. By spreading your investment among a number of different coins and investment platforms you protect your asset in the event that any one of them should fall over. Diversification is the exact opposite of “keeping all your eggs in one basket.”

The pie graph below shows a well diversified crypto investment portfolio.

Crypto Investment Portfolio Pie Chart

You will see from the chart that this portfolio includes a combination of (relatively) fixed assets and cashflow assets (income streams). The fixed assets are the actual coins you want to hold in your wallets such as bitcoin, litecoin etc, and the income streams include investment platforms such as BitConnect and cloud & hardware mining. How you want to set up your own portfolio is up to you, and comes down to the amount of risk you are willing to accept and how much growth you want to strive for.

If you put a greater proportion of your funds into lower risk assets such as Bitcoin and Litecoin, you might not see the huge growth that ICOs can potentially achieve, but you will also be exposed to a reduced level of risk. If you like to roll the dice and go for bigger, fast gains, then you might lean more towards ICOs and a few lesser known alt coins, but you will face a greater chance of losing value and money

For cashflow, think about a combination of low risk options such as hardware and cloud mining with a portion of BitConnect or some other coin lending platform for the added possibility of a larger income in the middle to longer term. Just be aware that it is not uncommon in the crypto space for high reward websites such as lending platforms to disappear overnight, so make sure you mitigate your exposure by balancing your “BitConnect” style investments with a more stable option such as investing in an ASIC miner or ETH mining rig.

As a general rule of thumb it is recommended to keep your total investment in any platform or asset to no more than ten percent of your overall portfolio so that you are never exposed to too much risk, but the choice really is yours.