๐Ÿ’ฐ๐Ÿ“ˆ The 70%/30% Cryptocurrency Investing Portfolio Approach (Updated V1.2) ๐Ÿ“ˆ๐Ÿ’ฐ

in #cryptocurrency โ€ข 7 years ago

It has been a while since the last post about the 70% Core / 30% Play Money approach I use for my cryptocurrency portfolio. Time for an update!

In the last couple of months my approach really got tested and it was not easy to always stick to the plan, I have to admit. There were a few brief moments where I felt the need to make exceptions to the rules I defined for myself. That is the main reasons why I want to share with you a slightly refined version of the 70/30 approach below.

The purpose of sharing is to provide some inspiration and add value for those looking for ways to manage their collection of cryptocurrencies. This is not financial advice in any way, just some guy sharing his thoughts. Always do you own research.

The 70% Core / 30% Play Money Approach V1.2

A little recap. The idea behind this portfolio approach is simple: a 70% โ€˜Coreโ€™ (long-term) segment and a 30% โ€˜Play Moneyโ€™ (short-term) segment. Each segment has its own guidelines and rules.


70Core30PlaymoneyApproach.jpg

The โ€˜Coreโ€™ segment

Having this set of coins/tokens enables me to reap the benefits from a growing cryptocurrencies market without losing sleep over too much volatility. This segment holds projects that are based on different blockchain protocols and are focused on different problems or opportunities to create diversification.

  • Investment period: Long-term (3+ months).
  • Total value rule: Must be at least 70% of the total value of the portfolio.
  • Number of coins/tokens rule: Maximum of 7 different coins/tokens at any given point in time.
  • Blockchain protocol concentration rule: Maximum of 2 tokens that are based on the same blockchain.
  • Rebalancing rule: Redefine ideal relative positions of holdings at least once a month and redistribute accordingly.

Other Core segment rules:

  • Know as much as you can about these coins/tokens (team, community, primary focus, tech, roadmap, most important competitors, funding, business model).
  • Make sure to keep yourself educated about recent and near future developments of these projects.
  • When redistributing, ignore small deviations from ideal distribution to avoid unnecessary transaction costs.

The โ€˜Play Moneyโ€™ segment

Having this segment in my portfolio allows me to enjoy the excitement of finding coins/tokens that have the potential to outperform the Core segment at least in the short term. It allows for speculation but simultaneously prevents unlimited Fear-Of-Missing-Out (FOMO) buying behaviour.

  • Investment period: Short-term (a few days up to 3 months).
  • Total value rule: Can be maximum 30% of the total value of the portfolio.
  • Number of coins/tokens rule: Maximum of 8 different coins/tokens at any given time.
  • Blockchain protocol concentration rule: Maximum of 3 tokens that are based on the same blockchain.

Other Play Money segment rules:

  • When adding a new coin or token to this segment, the investment should at least be โ‚ฌ300. This is to make sure that the potential profit is worthwhile the time invested in research and to avoid relatively high transaction costs.
  • When making an investment, set a date in the future at which you will evaluate whether to keep the crypto in your portfolio or sell it. When the decision is to hold, set a new date to evaluate again. The evaluation date should not be further than 3 months in the future.
  • When wanting to step out of a coin or token, sell all the coins/tokens you have of that particular project. Use at least half of the money to strengthen the Core segment and use the rest for future Play Money segment investments.

That is all there is to it. If you want to know more about the specific coins or tokens I buy, follow me and you won't be able to miss it. I post regular updates, like this one that might be interesting for you to read :)


Please share your thoughts in the comments below!


---> ๐Ÿ‘๐Ÿผ Follow me for regular updates on my cryptocurrency & token portfolio, purchases and research.
---> ๐Ÿ‘๐Ÿผ Resteems and Upvotes are appreciated ;-)


Disclaimer: I am not a financial advisor, trader or developer. I am just a crypto/blockchain enthusiast. Please do your own research, draw your own conclusions and do not invest any money that you cannot afford to lose.

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I'm moving more and more of my play money into my core holdings lately! The more I think and speculate, the more I start to believe that 2018 will be a great altcoin year. So I'm tempted to just HODL them all, and if I put in new money just get BTC with the new money instead.

The theory of 'this should go up more than Bitcoin does' still applies to 90% of all the altcoins out there after all. And if I felt like Bitcoin "can't keep going up forever" at the beginning of this year, it counts doubly so now that it's up way more than back then.

Besides.. the longer I am in crypto, the less I actually trade and instead just HODL. 9 out of 10 times it's just more rewarding if you're patient enough.
Nowadays when I see a flavour of the month coin, I invest maybe $50-100 at most and play around with that and try to flip it back into my core holdings.

I recognise your thinking :-)

For the most part I HODL and after some crazy weeks I put a lot of profits from the Play Money into the Core coins. I also did some profit taking though. In the coming days I will probably write something about that.

Good luck with the flavour of the month coins! Any coin in particular that caught your eye for January?

Not for January, but I did find one for February that is very very promising, go check it out!!
It may be the first ICO ever that I will invest in!

edit: may invest more than 'flavor of the month' amounts too

I have most my portfolio in alts going into the new year. I'll dump some major profits into larger coins like Ether, Neo and Bitcoincash.

Bitcoin itself is just way to expansive for me to even play around with. My holding is so low that I never make any real money, and moving any of it destroys me in fees. I'm still holding an even amount to what I have in Bitcoin Cash, but if Bitcoin doesn't fix these issues it's going to be left in the dust.

Same here. After some crazy weeks I really had to redistribute! And indeed, wallet to wallet transaction costs with BTC are not motivating. I don't play around with BTC that much, just have a little bit for the long term.

Good luck in 2018!

Thanks you too!

That's very informative, having an investment part and a play part can be really enthusiastic for a crypto lover like me.

Although I have plans to buy more BTC for the coming year, I will divert some funds to other major altcoins for the long term.

nice piece and very logical. I do the exact same. I take play money out of something like a Basic Attn token and take play$ $ out and put into my core coim XRP..lol ๐Ÿ”ฅ๐Ÿš€

This is a good way to stay in control I especially like the evaluation bit.

That evaluation element is very valuable to me. It is still quite difficult to have the discipline every time, but it definitely helps to make choices based on at least some fundamentals :-)

Yes I agree, I will definitely be trying this :) it can get pretty wild out there without any fundamentals!

Your post resteemed and upvoted by @yusifm
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Thanks for sharing, nice to know u.

Hope you'll get some inspiration out of it!

I will do this approach. Thanks for the insight!

Thank you for your insight :)

@cryptotem thank you appeal to @sportic. Your post will see more than 7K of my followers

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