Crypto-Currency Investment Strategy
There are many ways to strategize your investments with anything. Whether it may be real estate, stocks, commodities, forex or better yet crypto-currencies. Crypto-currencies have been around for little less than a decade, with many venture capitalist investing into companies that are working on the development of blockchain technology or simply into the coins/tokens themselves.
In this article I will explain a few ways I strategize my investments in the crypto-currency industry. However, you may use this as a guide to steer yourself in the right direction, when strategizing your portfolio.
First of all, I tend to keep things simple and use percentages to divide up my capital for diversification and have a float for trades or other things. However, before we go over these strategies lets go over a few basic investment rules for both inexperienced and experienced investors should follow.
Important Investment Rules
- “Never invest more than you can afford” – Do not risk your life over an investment, money isn’t the most valuable thing, Life is the most valuable thing.
- “Do your Homework” – Always research the company, product or crypto-currency that seems interesting for you. Knowing is half the battle. The historical roadmap is important as well as the future roadmap.
- “Diversify to Control Risk ” –You would want to diversify your portfolio to control the downside. I tend to do this a lot, and will explain in a bit.
- “Be Patient” – You can’t expect to get rich or make thousands of dollars over night, investment takes time. For example; Real Estate, you purchase a property over $300k, and you rent it out perhaps at $1500 a month, it would take 15-20 years to get your ROI (Return on Investment). Everything after that besides expenses are all profit. Alright, lets get down to Business!
Applying those simple investment rules above can help you become a successful investor. With those rules in mind I will explain how I diversify my portfolio. Remember, that this just a guide to help you diversify your portfolio. There is no correct way to invest your capital, each person has their own perspective for diversity.
Lets keep it simple by using Percentages (%) and whole numbers.
Say you have a capital of $1000, with a total percentage of 100% I would split up that 100% put it in different things.
Here is a basic breakdown:
- 40% or $400 allocated into Bitcoin(BTC) to hold for long term (Several years at least) We all know where Bitcoin can go in several years.
Want to know where to buy Bitcoin? Click here
- 30% or $300 allocated into Bitcoin mining to multiply your bitcoins over time. If you want to mine Bitcoin and other crypto-currencies check this related article CryptoCurrency Mining
- 15% or $150 allocated into alt coins, perhaps can be Ethereum(ETH), Monero(XMR), Zcash(ZEC) or any other currency of your choice with a good roadmap, for long term.
- 15% or $150 allocated into trading for quick swing trades more or less money you can play with, that you’re willing to lose.
If you want to know the top crypto currency trading platforms are click here.
So that’s 40+30+15+15=100% split up into different things. Best thing is to have multiple streams of income in my opinion. Of course, this breakdown would depend on you whether you want to follow this or change it around a bit, all up to you. Diversity, Careful not to over diversify your portfolio.
Another strategy I use mainly for Bitcoin
Say you have $10,000 at 100% capital (Clearly the amount in fiat would depend on your personal profile)
- 30% or $3000 – allocated into Bitcoin(BTC) to hold for long term (Several years at least) We all know where Bitcoin can go in several years. Set it and forget it.
- 20% or $2000 – allocated to a dollar-cost averaging strategy over a period of 6-8months. To purchase bitcoin. Meaning, Spread out your purchases.
- 20% of $2000 – allocated to a average down strategy, this provides liquidity Â to invest when the market is down significantly.
- 15% or $1500 – allocated into alt coin portfolio consisting of 5-10 popular currencies with purposes, and good roadmaps as mentioned above. (I would split this up evenly through different alts)
- 15% or $1500 – allocated into new opportunities such as ICOs (Initial Coin Offering), startups currencies, crowdfunded assets or bitcoin mining.
Re-capping this strategy that’s 30+20+20+15+15=100% that is split amongst different assets, with a total of $10,000. These are just a few ways I would strategize my capital.
I just also wanted to point out that for me personally, creating passive income that you will earn for life is also a great thing to find. Work once and get paid for it the rest of your life. Something like movie actors get paid every time their movie is aired, played, purchased and more. Similarly, MLM or Network Marketing businesses can create passive income. Work once and if you work hard enough you can create passive income.
Wish you all the best with your investments.
Other Related Articles
Before I start this article please know that I am NOT a Financial Advisor, everything you do with your money is at YOUR OWN RISK! I am NOT responsible for your money. I’m only sharing how I strategize my investment.
Please also Note that there are many Scams dealing with Bitcoin and crypto currencies. About 98% of investments claiming you make 2% a day or more, or they can double your bitcoin in 30 days is probably a scam or a Ponzi scheme. So please be careful!