Model Portfolios for investing in Cryptocurrencies

in #cryptocurrency • 7 years ago

Investors today have a binary feeling towards cryptocurriences. They feel that it’s a poor investment or they become obsessed and invest every penny they can spare.

It is my believe that everyone should hold a percentage of their wealth in Crypto but not all of it. The amount an investor puts into crypto will be heavily determined by their income, life situation and tolerance for risk. The cryptomarket is a very volatile space but it does have the potential for exponential growth. The pot-odds are very high.

When I first started in crypto I put down a conservative two percent of my net-worth. It was in 2013 and I saw immediate gains, which then turned into immediate loses as the market crashed. I didn’t get emotional and continued to hold what I had purchased and conservatively bought more throughout the years. It is now 2017 and the crypto portion of my portfolio has seen significant gains and makes up a much higher percentage of my total portfolio.

Overall portfolio

Below I have outlined what a typical portfolio may look like that includes traditional stocks and bonds and adds in cryptocurrency. This was modeled around someone age 30 who has a medium-high tolerance for risk.

Stocks (ETFs) 55%
Bonds 30%
Crypto 15%

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#investing #money #bitcoin #cryptomarkets
7 years ago in #cryptocurrency by
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     7 years ago  

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     7 years ago (edited) 

    Hi cryptoindex,

    Thanks for this post! Few things:

    • Is there a more detailed breakdown to the Stocks and Bonds portions of your portfolio? I know this post is about cryptocurrencies, but I'm still interested. I would like to know if you divide the stocks by some criteria, as market life-cycle/industry etc.
    • It would be really interesting to see this done for different age groups. How do you think different portfolios should look like at different stages? Also, would you change anything about the crypto sub-portfolio for different age groups?
    • I would like to push back on your advice for a 5-7 coin holding - keeping in mind that you did state that it was just an example. Sure, increased number of coins doesn't necessarily equate with improved quality of diversity, but I think what matters the most here is the size of the coin's share of the portfolio relative to some other indicator (market cap, supply, age, etc). Given how cryptocurrencies don't have to come in "1s", you could theoretically hold a portfolio of over 800 coins while still having a "well-diversified portfolio".
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