Steemit Crypto Academy - Week 7 - Homework Post for @stream4u

Hello awesome people, how is everyone doing, hope everyone is doing great and having an amazing and wonderful day. Super excited to be part of this amazing crypto lecture week6 and to be involved in the courses. This is really awesome as it is a wonderful way to add value to the community and also receive knowledge as well. For me. I have gained so much knowledge so far learning from these courses and I have to say, it has really helped improve my understanding of blockchain and crypto topics. This week’s topic covers Money Management & Portfolio Management…

What is Money Management?

When it comes to investing in cryptocurrency asset, there are some strategies that are considered so as to make the best investment decision and that is where money management comes in…

Money management is basically a financial strategy that determines how an investor or trader is going to invest funds into any cryptocurrency assets. This simply means that money management helps investors or traders segment their investment capital into parts so as to make the best use of the funds and better investments decisions on any cryptocurrency assets.

What money management does is that it determines when a trader is going to jump into a trade and make a purchase and also the quantity the trader is going to buy, and at what point should the trader decides to quit for the day. That way the trader learns and understands how to tolerate and be patient in the cryptocurrency market, using set rules and not based on emotional decisions in order to be in the best possible position.

Future Plan on Money Management

Investing in any cryptocurrency asset can be tricky but it is very important to have a very good money management strategy. For me, the future plan is to utilize more the power and benefits of money management by dividing investment capital into segments or parts, probably about 4 parts so as to be in a better position to invest in different crypto assets. This is good because it helps to split the bulk capital into different investments, that way the risk can be reduced and also the success of one part of the investment can bring overall profit to the total capital invested.

Portfolio Management

Similar to what I explained about money management, Portfolio management is also another management strategy that helps investors make the most out of their investments or invested capital. Portfolio management is basically the act of managing different cryptocurrency assets that make up the investment portfolio. This is also diversification of the investment capitals into different cryptocurrency assets to make up a portfolio in order to strategically reduce risk and make the best use of investment capital.

In my opinion, after a certain investment capital is set aside for investment, it is better split the capital into different parts in order to diversify and spread the investment on different cryptocurrency assets. A cryptocurrency portfolio is made up of multiple cryptocurrency assets with a certain amount invested in each of the assets in the portfolio. It is also good to have a portfolio that is made up of cryptocurrency assets that fall under large marketcap assets, mid marketcap assets and low marketcap assets and risk capital assets.

Future Plan on Portfolio Management

When delving into any investment in cryptocurrency, it is important to understand and practice money management and portfolio management… these are very important strategies that help reduce risk and also help maximize investment capital to make the most profit.

The plan is to first utilize money management strategy in order to strategically segment the investment capital into different parts before delving into portfolio management. After the investment decision is made on the different assets to invest in based on low risk and high-risk-high reward assets and the different allocations to be made. This can be classified into high marketcap assets, mid marketcap assets, low marketcap assets and risk capital, to make up the portfolio.

Investment Failure

Investment failure can happen when the funds are invested without proper research, analyses and strategy or invested in bad or scam projects. For an investment to fail, the project itself must have gone extinct which is rare in the crypto space at the moment except for scam projects. A cryptocurrency asset can drop in price to almost nothing, but it is not yet a failed investment except the investor decides to sell all the holdings at a loss.

Like we have seen so far in the crypto world, there are a lot of cryptocurrencies that have risen from the ground to reach all-time highs or get back to their previous all-time highs after reaching all-time lows. That is why it is important to do proper research and invest only on quality projects. Price is secondary because the price can drop, but a quality project will always bounce back like we have seen on various cryptocurrencies rising back to the top.

Conclusion

Investing in any cryptocurrency asset can be tricky that is why it is important to have a sound knowledge of the various aspects of cryptocurrency investment and the different strategies like money management and portfolio management, so as to reduce risk and increase the chances of maximizing profit and making the most out of the investment.

Cc:
@steemcurator01
@steemcurator02
@steemitblog
@stream4u