Coins, Coins Everywhere

When starting cryptocurrency trading, the vast number of coins to choose from can be overwhelming. From the thousands out there, how can you possibly decide which few to keep in your portfolio?

Although there are an endless amount of strategies when choosing coins, there are a few different tactics you should follow to minimize your risk. In this guide, we’ll teach you the tips and tricks on building your portfolio, so you have a more successful cryptocurrency trading experience.

Diversify Across Market Caps

A great way to minimize your downside risk when cryptocurrency trading is to diversify your holdings across different market caps.

In case you don’t know, the market cap of a cryptocurrency is its price multiplied by its circulating supply. Usually, the higher the market cap of a coin, the less volatile it is. A properly diversified portfolio contains a mix of large (>$5 billion), medium ($250 million to $5 billion), and low (<$250 million) market cap coins.

Large market cap coins like Bitcoin and Ethereum may not experience the same 40-50% runs that smaller altcoins do, but their price typically holds better in bear markets.

How you diversify among these classes depends on your risk tolerance. If you think that investing in cryptocurrency is already a gamble, a portfolio that consists 95% of large-cap coins may be appropriate for you.

Maybe you have disposable income, though, that you wouldn’t be too upset losing. In that case, it may be worth putting over half of your portfolio in small-cap cryptocurrencies. Coins in this class have a high probability of being worth nothing down the road, but the ones that end up growing 100-200x could make the risk worth it.

In the end, you should do a serious evaluation of your risk tolerance as well as the amount of money you’re willing to lose and choose your market cap split based on that.

Consider the Industry

Another thing to consider when building your cryptocurrency portfolio is the industry that each coin is targeting. There are a couple of different ways you can approach this.

Diversify Across Industries

Once again, diversity is key. Because blockchain is still young, it’s difficult to predict which sectors will be most accepting of the new technology. To hedge against this risk, it’s recommended that you invest in coins across different industries.

You can group the most popular cryptocurrencies into a few different categories:

These are just a few of the categories in which you can place coins, and you’ll quickly find that there’s plenty of overlap for some of them. The idea of this strategy is to avoid investing too heavily in any one category. If for some reason that category ends up bombing, you don’t want to be left holding the bags.

Bitcoin TradingDouble-down on Your Favorite Industries

Even when holding coins across a diverse set of industries, you should consider putting additional capital in the industries that you’re most confident in.

There’s a popular notion in the cryptocurrency industry that only one coin per category will win out. But, that just isn’t the case. Take a look at any other business sector. Delta, American, Southwest (airlines), AT&T, Verizon, T-mobile (cell carriers), Chase, Wells Fargo, Bank of America (financial institutions) – and the list goes on and on. People have their preferences and categories are large enough for multiple cryptocurrencies to survive.

For example, if you think blockchain and file storage is inevitable, you may invest in Sia, Filecoin, and Storj. Or, if you’re a big believer in supply chain projects, VeChain and Waltonchain could take up a considerable amount of your portfolio.

Look for Hidden Gems (if you have the time)

The best coins to have in your portfolio are oftentimes the ones that not many other people have. There’s wisdom in going against the crowd.

Finding coins that haven’t haven’t become popular yet is a time-consuming process, though. It usually involves days (or even weeks) of research and slogging through a bunch of white papers. Even reviewing fifty projects may only lead to one or two that you deem worthy to invest in.

However, these one or two coins could be the key to an uber-successful portfolio. Let’s look at some examples:

  • Early investors in AntShares (now NEO), have seen ~160,000% return on their investment.
  • An investment in Bitquence (now Ethos) would have brought you a 4,300% return.
  • And, your portfolio would’ve grown by almost 4,000% by finding OmiseGO early.

As you can see, there’s immense value in finding coins early. If you have the time to research and enough money to take the risk, it could really pay off.

Cryptocurrency Trading is All Trial and Error

As you build out your cryptocurrency trading portfolio, you’ll probably find other tactics that also fit in well with your trading strategy. Additionally, you’ll most likely try out advice that sucks. You may even find that you don’t agree with the tips listed here.

And, that’s okay. Becoming a cryptocurrency trader is a learning process, and each investor inevitably molds their own unique style as they become more experienced. The important thing to remember is to keep an open, yet skeptical, mind and enjoy the ride.

This article by Steven Buchko was previously published on Coincentral.com

About the Author:

Steven Buchko is a managing editor at Coin Central and a blockchain investor. He’s also the co-founder of Coin Clear, a mobile app that automatically turns your daily spending habits into cryptocurrency investments.

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Douglas uncovers the underlying reasons for lack of consistency and helps traders overcome the ingrained mental habits that cost them money. He takes on the myths of the market and exposes them one by one teaching traders to look beyond random outcomes, to understand the true realities of risk, and to be comfortable with the "probabilities" of market movement that governs all market speculation.

Retirement Planning

You have to plan for your retirement. It can be difficult for some people to plan for something that is years away, but you must start now.

Save early until you’re at retirement savings grow. It does not matter if the amount is small; you should save a little bit now. Your savings will grow over time.When your money is accruing interest, your money has the chance to grow to provide you with extra money later on.

People that have worked long and hard eagerly anticipate a happy retirement. They think retirement is a wondrous time where they can do everything they didn’t have time for while they worked.

TIP! Start your saving early, and continue it until you retire. Even if you can only save a little, it’s important to do it now.

Partial retirement may be the answer if you do not have the money. This can mean working without entirely giving up your paycheck. This will allow you the opportunity to relax as well as earn money.

Contribute to your 401k regularly and maximize the amount you match that is provided. You can put away money is not taxed. If you have a plan that has your employer matching the contributions you make, you’re essentially getting “free money”.

Your entire body will benefit from your efforts to stay fit. Work out every day so that you will soon fall into an enjoyable routine.

TIP! The majority of people eagerly anticipate the day on which they can retire, particularly after working for years. They will think that retiring will be great since they can do activities that they couldn’t when they worked.

RetirementDo you feel forlorn due to lack of retirement planning?There is never a time to get started. Examine your financial situation carefully and determine how much you can save monthly. Don’t think it’s bad if it is not a lot.

You should save as much as you can for your retirement, but you need to invest wisely. Diversify your savings plans so you don’t put all your money in one place. This will keep your risk.

Consider waiting two more years to take advantage of Social Security. This will help you will draw each month. This is easier if you can still work or use other income sources for retirement.

TIP! Does the thought of retirement terrify you now, because you never began saving for it when you should have? Don’t give up. It’s better to start now than not at all.

Many dream about retiring and exploring all of the opportunity to accomplish their earlier years. Time certainly seems to slip by more we age.

Health Care

Think about a health care plan. Health often declines for the majority of folks as they age. In some cases, such a deterioration of health escalates health care costs. If you have a long term plan for health, you won’t have to worry as much.

TIP! Examine your existing savings plan for retirement. Take advantage of any retirement plans that your employer offers.

Make sure to have goals. This will help you in your savings. If you know what kind of money you need, then you know what your goal should be. Some simple math can help you figure out monthly or weekly goals.

Retirement planning and preparation needs to take place throughout your entire working life. It is quite feasible, provided you have good information. You can easily get going with the basics within this article. Use the ideas within this article to make your retirement planning easy.

Many people are interested in retirement, but are unsure of how to learn more. Luckily, the following article has some great information to help you get started. Now is the time to take the knowledge you have gained and apply it to your life!

Invest in a new home business

Stephen Collie: “Let’s face it, the majority of us dream of one day starting up and successfully running a new business at home and leaving our miserable jobs behind to become our own bosses”.

And whilst many do just that and at least make a go at running a new business there are even more who never quite stop dreaming about it and find the courage to actually do so.

One of the reasons people give for not starting up a new business is a lack of finance. Well firstly that is a very poor excuse, if you believe in yourself and your own abilities to make a success of your venture then that alone is the biggest investment you can make in running a new business. “Yes, you are the most valuable asset a new business can have, you and your specialist knowledge, your pride in getting a job done properly and having an absolute belief in your own abilities to make a success of running your new business”, says Stephen Collie.

Invest in your own businessLet’s say it again, ultimately you are the only thing worth investing in for running a new business and you don’t cost a penny, dime or cent. So what are you waiting for?? Running a new business is absolutely free, you don’t actually need to invest in it to get it off the ground because all the investment should come from within you and not from a bank or money-lender.

Stephen Collie: “So once you’ve decided to invest in yourself, first in order to get your new business off the ground you are at some point going to have to think some sort of financial investment”. See, eventually money does come into it but it is useless if your business plan is useless or you don’t have the personal wherewithal to actually make a good idea happen and the best place to seek such investment will be your bank.

Stephen Collie: “All banks will have a new business advisory department and they will be more than happy to talk with you of your business plans, so make sure your plan is a good and sustainable one and if it is: they’ll certainly listen and if they like it, they will definitely lend you the money”. It should be said that banks exist for you to borrow for things such as investing in a new business, they like people who are prepared to give it a go and if you demonstrate this and a fierce determination they’ll lend you the money to kick-start your new business.

When investing in starting up and running a new business it is vital that you don’t waste your initial investment on fancy cars, flash offices and a menagerie of staff. Basically, don’t walk before you crawl, all these trappings of success will come in time but to start off creating an image of success ultimately will mean you will fail because the best investment you can make at this stage of running a new business is dedication and hard work, that’s how you achieve lasting fulfillment and success and the trappings that go with it. “If you just want the trappings without the hard work then don’t bother starting your own business because hard work is a better investment than an unearned top-of-the-range motor”, says Stephen Collie.

Reaching to nature for the best metaphor to consider when investing for running a new business, it is a whole lot better to invest in a bag of acorns and watch them grow, yield and flourish than it is to buy a lot of old oaks and see them wither and die.

And finally, again, it should said the biggest and best investment for a new business is you, your idea and your desire to succeed. With these, you can’t go wrong!!

 

Recommended by Stephen Karl Collie