Balanced Portfolio – An Ideal Portfolio Mix for All Experience Levels

A long-term portfolio should ideally be “Balanced”. A reference is the Rule of 80-20 of Pareto. Pareto says that 80% of your portfolio value should stay with 20% of the coins.

New investors can participate in tokens that are available in centralized or decentralized exchanges. These tokens can be classified according to their market caps. Let’s explore more about this. You can get more of these kinds of analyses by subscribing to Altcoin Buzz Alpha.

How to Build a Balanced Portfolio

We consider that there are three types of coins:

  • Blue Chips and Large-cap coins: They have a greater than 500 Million market cap. They have Low-Risk, Low Multipliers.

Distribute your portfolio in such a way that a large percentage is in Large Caps. Buy the dips on large caps. They might give low multipliers, but in the long term, they are more stable investments. Approximate position % = 40%.

Hold Term: One bull cycle.

  • Mid-Cap coins: They have approx 100 Million to 500 Million market Cap. They have Medium-Risk, Average Multipliers. These projects are in a growing phase and need to be monitored constantly.

Midcaps are projects that have gained good traction but still have a long way to go. They need to be constantly monitored and are riskier than large caps. You can accumulate them on dips.  Approximate position % = 25%.

Hold Term: 1 year or more.

  • Low Cap coins: They have approx 1 million – 100 million market cap. They have High-Risk, High Multipliers.

These are extremely risky early-stage projects but can give maximum returns. Invest the money you can afford to lose. Do not go all-in on Low Caps. Also, it is better to include a launchpad token to get access to IDOs. Approximate position % = 20%.

Hold Term: 6 months under constant monitoring. If the project delivers and becomes a mid-cap, extend the holding term.

Beginners Intermediates Pros
Large Cap 50% 35% 25%
Mid Cap 30% 40% 30%
Low Cap 10% 10% 20%
Gem Call 10% 10% 15%
High-Risk Low Cap 0% 5% 10%
Total 100%

Note: The model needs to be readjusted as per market conditions. This is just indicative, and you can create your percentage portfolios according to your risk profiles.

Balanced Portfolio – An Ideal Portfolio Mix for All Experience Levels

Disclaimer

The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers and their risk tolerance may be different than yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.

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