Homework Task week7 for Professor @stream4u |Money management| Portfolio Management|

Hello Steemians, welcome to another week in the Steemit crypto academy. I appreciate these lessons as they have become an eye-opener in cryptocurrency technology. Today's lesson was delivered by crypto professor @stream4u on money management and portfolio management. This blog is my homework task after the completion of the lesson.

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Q1- Discuss Money Management

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Money management can be a technique and plans on how a capital will be used in making investment decisions. Good money management involves diversifying capital into different assets to generate returns. This is advisable as the market volatility differs for a different asset, investing in different assets limit the risk on your investment and maximise your chances of making potential profits from your investment.

Q2- Future plan on your Money Management

Personally, I always set up 10% of my income for investment purposes. I’m a cryptocurrency investor and I understand the risk involved in investing in cryptocurrency investment. I always have a watchlist of potential cryptocurrencies from the medium capital asset, small capital asset and penny cryptocurrencies which I have performed technical analysis and fundamental analysis on. I keep monitoring these cryptocurrencies until I find an opportunity to buy.

Q3- Discuss Portfolio Management

We have discussed the need to diversify your capital into different assets to minimizes the risk in your investment and increase your chances of making potentials returns. Now where the toughest decision lies is knowing the portion of your capital to invest in a different asset. This is where portfolio management comes into play because an investor might not want to invest much capital on a high-risk investment. In a simple term, portfolio management is managing assets in the investment portfolio to maximise the returns in the investment. Similarly, portfolio management involves making investment decisions considering the risk involved and potential returns on a particular asset.
Below is an example of my portfolio on Binance exchange.

From the image above, I diversify my investment into different cryptocurrency. These investment decisions are based on the technical and fundamental analysis carried out carefully on the projects. Similarly, the majority of the cryptocurrency I invested in is the large capital (BNB, DOT, XRP, ADA) and medium capital assets (TRX, DOGE, BTT, XLM) which still have great potential to increase their market capital in the future as the projects are still at the development stage. These investments were made considering the risk involved, I already know that the return of an investment will be small and will take a longer time, but im sure my investments are made with lesser risks.

Q3- Future plan on Portfolio Management

My future plans on portfolio management are to fully understand the basics of the projects I’m investing in. As a cryptocurrency investor, this can involve studying the whitepaper of cryptocurrency projects and running background checks on the team and developers involved in the project. Similarly, I’m working on expanding my knowledge of technical and fundamental analysis to help me make better investment decisions. Furthermore, I look forward to diversifying my portfolio to accommodate small capital cryptocurrencies as the promise to give huge returns within a short time. But this is based on knowing the risk involved and making my research carefully.

Q4- When was the last investment failed and why?

The last investment that thought me a lesson was in 2018. I invested in Avinoc token during presale and bought the coin at $0.1. The project was looking good after reading the whitepaper. I didn’t have a good knowledge of cryptocurrency then before investing in the coin and I didn’t run a background check on the team involved in the project. after presale, the coin was later listed on the CoinmarketCap which attracted more investors to the project. But as time goes on, the project was abandoned and dumped by the team.

Avinoc token has been delisted from CoinmarketCap and recently have no market data or trading volume. This experience thought me a lesson and I have decided to not invest up to 5% of my investment capital on projects during presale or ICO.

In conclusion, efficient investment decisions are vital and the risk involved in any investment decision is proportional to the return. Good money management and portfolio management plays a crucial role in balancing this risk and return in investment. Similarly, all investment comes with its own risk especially in digital assets which has very high volatility, an investor should be careful in making research and seeking advice from professionals before investing in any asset.

Thank you Professor @stream4u for this amazing lesson.

Best regards:
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