I would also like to share my investment strategy with you guys and to see if this may help some of the newer investors out there. Now, I got into the market really early and I started making these huge gains, but I didn't know how to take profits, or when to take profits. This is a challenge for a lot of people.
In the last month, I think I figured it out. With any investment, you need to set some clear targets and goals, if you don't have any targets, it's hard to know when to take profits. I use this same strategy with my stock market portfolio, why didn't I use the same strategy with crypto? Duh..
What you have to do is create a portfolio mix. Once you do that, taking profits is easy. Now, this portfolio mix is going to differ dependent on your risk profile.
What are the different types of risk profiles? You can look at them here:
http://canadiancouchpotato.com/wp-co...eries-2017.pdf
^that's pretty standard in the financial industry. (Bond Index Fund = CASH/USDt for the crypto space)
For me, i'm towards the Assertive side. What does that mean for crypto?
20% = USDt
This means, at ALL times 20% of my portfolio is in USDt (or cash).
Fundamentally, everyone should be holding coins they see long term potential, this helps with your mix.
Right now, this is my mix:
"Asset Allocation"
40% ADA
20% USDt
20% NEO
20% alts
^ What does this mean?
Q: What do you do when the market goes up?
A: You rebalance your portfolio and take profits into USDt
ie. At one point my USDt allocation was down to like 5%, this meant all of my alts were up. I need to rebalance. I took profits from ADA, NEO, and all my alts. I sold those and bought USDt until my USDt allocation was back up to 20%. When I rebalanced, my portfolio looked exactly as it did above.
Because my risk profile is 20% in cash, I need to maintain that, otherwise I would need to change my risk profile.
Q: What happens when the market drops?
A: You rebalance your portfolio and move USDt into Alts
ie. The market is tanking right now, so my USDt position is up to like 40%. I could hodl right now, but my risk profile is more assertive, so I need to get rid of USDt. So I started to slowly buy more and more ALTS to meet my asset allocation.
Hopefully, this helps some of you guys. Too many of the people I talk to are ALL IN on crypto, that's great and all, but that's way too risky. If you create a proper asset allocation, then taking profits is easy and when the market is down, you have funds to buy alts at a discount.