Portfolio Rebalancing - Jan 2018 - Done!
When the speculative part of your investment portfolio moons, you really have no choice but to rebalance your entire investment portfolio, that is if you are following best practice portfolio management concepts. See my Buy Low, Sell High post for more on that.
Being that my crypto investments are inarguably speculative, and since the speculative part of a balanced portfolio shouldn’t exceed 10-15% of the total portfolio, in the last couple of days I’ve had to completely rebalance my total investment portfolio. This required making difficult decisions, the first of which had to due with how much STEEM and BTS I was willing to part with. In the final analysis, the answer was “as little as possible”. That meant complete liquidation of some of my holdings.
Basically my portfolio management criteria obligated me to sell around half of my total crypto, and since I wanted to hang on to as much STEEM and BTS as possible, I had no other choice but to let go of all of the older, crypto 1.0 holdings. Like @stan said in this interview a few days ago, I also believe that POW is on its way out, so I cashed out of SYS (although they do have a planned conversion to a masternode type PoS, but it seems to be taking more time than initially thought), GRS, NLG and DGB. I also sold everything but a handful of ADA, in this case because I think it’s getting pricy.
In the end, I’ve brought my total investment portfolio more or less in line, but in doing so I've taken my crypto portfolio down to a very low level of diversification with STEEM, BTS, BitUSD, some SBD, and that handful of ADA. This could be viewed as a rather risky portfolio given the lack of diversification, but it just may be the case that STEEM and BTS move completely out of the speculative category altogether in 2018, in essence becoming members of the “growth” part of my total portfolio, leaving the speculative phase behind. Suffice it to say that I’m very positive on the future of both STEEM and BTS, and while I would not be initiating new positions at these levels, I’m not willing to sell them either.
Remember, the idea is to buy low and sell high, and especially so when it comes to speculative investments where buying high often means losing it all.
Hope everyone else is happily rebalancing as well. There are lots of profits to lock in. Remember, nobody ever went broke taking profits.
@cryptographic,
Yesterday I had a chance to read about DPoS, PoS and PoW. STEEM, BTS belongs to DPoS and build by Graphene's blockchain framework. Graphene is the fastest and the real time blockchain technology so far! Actually this is the future. I am not going to sell my BTS, STEEM to anyone! It will be precious in future, that's how I feel it!
One more thing! I wish to hear your review about EOS too! Coz I want to hear from genius like you do!
Cheers~
EOS is still very much in development. It's similar to ADA in that sense. I'll be looking at dip buying on intermediate term pullbacks in both, if we get them, and, if not, no big deal.
@cryptographic,
I am planning to buy EOS and want to learn more about Graphene blockchain! @stan is a great reference for that! Yeah buy at dip, that's what I want to do too! I will check ADA also! It's concept also so powerful!
Cheers~
Great post! Risk management is always key in great investing. I enjoy reading your post but actually got a bunch of information from the comments section because you reply so much which is awesome! Thanks for being engaged with the community.
In case you missed it my BTS loving friend....here is @stan's latest.....
https://steemit.com/bitshares/@stan/bitshares-enterprise-alliance-part-1-alice-s-hero-hub
Everything ETH and BTC ever wanted to be . . . and never will!
Thanks for keeping me up-to-date!
I am a great fan of bitshares and I took this when bittrex delisted it and the price hit 0.06 but I took the position and it paid me well but I booked profit when it was 0.46 and after that it again sky rocketed to 0.86, so I think I lost opportunity but 7X is also not that bad, after all it gave 7X profit in just 2 months.
Sometimes "fear of success" emerge in when u hold a profit coin.
Anyway nice article by you @cryptographic . Thank you.
I like your modified crypto market cycle chart. Sometimes you've just got to tilt the chart!
I can call you a portfolio master because managing 10X return in just 2 months is not a joke, here people wait for years to get those return. And your a seasoned risk manager of your portfolio @cryptographic.
Thank you for sharing your risk management module here.
Steem on and stay blissful.
Nice market and economic cycle contributions. Thanks.
That's perfect way to deal with crypto market and we need to strike balance in between emotion speculation and intuition and you are kind of one who knows how to deal in a best way with these three.
Thank you @cryptographic for writing this good article. Have a great day.
Thanks for those market cycle graphs!
By the way, if you're a Wyckoff fan, this is something you might like (if you haven't already seen it): https://www.scribd.com/document/28001506/Anatomy-of-a-Trading-Range-by-Jim
Cheers
yes...yes...thank you so much for giving the link here...this is certainly my area of interest.
Thank you again.
@cryptographic Thanks for the update. Looked into bitUSD and wanted to ask if the position is a hedge for BTS. Do you expect the value of bitUSD to increase in price like SBD did, which were both created to peg a dollar in USD? I'd assume your bitUSD position will be used to sell rips in BTS and buy dips using bitUSD and trade within the BTS platform.
Also - with the proceeds from the sales, are you waiting to load up more in current positions?
The proceeds are going into real estate, which was underweighted, and which I view as a very safe long term hedge against fiat debasement similar in potential now to precious metals, or maybe even better. Not as good as crypto though, but much less risky, so there's a balanced trade-off there. On the other hand, you've got to make good picks, and in that regard, real estate is a lot like crypto, or stocks for that matter - location, location, location when it comes to real estate.
BitUSD is a much harder pegged instrument than SBD, but it could still get very scarce in a panic. That having been said, I've chosen to use it as a cost effective hedge against a crypto bear. Dry powder, as it were, with which to buy back on any major pullback. Syscoin will remain on my radar along with ADA and EOS, and if opportunities arise, I'll trade them. Neither ADA or SYS are listed on BitShares, so I'd have to go to Bittrex, for example, but that's no problem as they would immediately go to their respective wallets. I don't rule out other possibilities that we come across either, but, right now, I'm pretty bearish and I'd only be scalping if I did anything.
Congrats on the real estate made possible by your savvy investments. You truly practice the well-balanced portfolio mindset and I would have to agree that is the best way to go. A load of pressure was released after I re-balanced my oversized LTC and ADA positions recently.
May start blogging about swing trading in and out of BTS once I accumulate enough shares. Curious to know what % of bitUSD you have on the sidelines ready to buy a significant pullback.
Following best practice portfolio management has made all the difference in my life.
I've only got around 20% BitUSD right now (crypto only portfolio) basically because I'm so bullish on STEEM and BTS that I think they will be up even in a down market.
Good to know! Appreciate the info and guidance. I'll updating my technical analysis on BTS/STEEM and more in my posts. Trying to get into a routine of making daily posts: https://steemit.com/trading/@dirkboy41/bts-eos-steem-update-good-bounce-today
Hello @dennisschroeder,
Extraordinary good article with exceptional advice. The graph you used gives a clear idea about what you want to tell us.
Here I'm attaching BTC graph of 2017 - 2018, as you said yes, after we made the profit better take the profit & re-balance the portfolio. You did the best method of Risk mitigation a best trading experience & exceptional risk management lesson as well.
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Your viewpoint of 2018 crypto world is exceptional either. You understood PoW is the expired version & now it's time of BTS, STEEM and few other new generation cryptos. This is the most extraordinary good article I read about the preparation to welcome 2018 crypto world. Specially you did it with an idea. Impressive & absolutely a brilliant thought. Thank you.
~@mywhale
Risk management is the name of the game!
Yes, I think this could be the end of the line for POW. 2018 might not just be a big year for the transparent and fully compliant cryptocurrencies, it might also be the year of the big shipwrecks for those who are at the opposite end of the spectrum, and if they're POW, probably guaranteed.
That BTC chart is an interesting parallel, but we need to keep in mind that was a 1 year 20x at highs, compared to my Alt portfolio which was a 1 year 1,000x into highs (just a 10x in the last 2 months). The model portfolio posted in May on Bitcoin Forum was a 100x. I didn't have much choice other than proceed with a massive rebalancing.
This gave me a sigh of relief.
I was wondering if you were going to sell them...I am glad I am not the only one who is super optimistic on both. Hodling them, to me, is a no brainer. In fact, they are the part of my portfolio that I think will provide the high multiple returns. I still have a bit of BTC and ETH (wish I had more the way that one is running). If I am overweight in anything it is LTC which I still have a decent holding in (number three in terms of total dollars behind STEEM and BTS.
My hodlings in dollars...
2, BTS
Yeah, I guess that when it gets down to brass tacks, I still view both STEEM and BTS as strong buys at this point, and I can't really say that about anything else - of course, I'm not abreast of everything out there either so I'm sure I've overlooked something.
I have been looking at PRE a bit closer...I dont have much but a small position is forming.
Decentralized search is a rather interesting project... a multi-year development time.
i invest and reblanced nicely between the top crypost cardano seems to be my currently top favorite and then iota is yet to show its upward moves apart from that some new coins like ethlend,electroneum holding for long what else you would suggest for long term holding
The only thing I can say is be careful. Fully research and understand what you've got. There are going to be nasty surprises in the coming months and years. Huge blow-ups will happen, and it's never pleasant to be part of them. Cardano is a peer reviewed, mathematically proven safe crypto with huge potential and that I think is here to stay, but a bit pricy right now in my opinion. Price aside, I put it up there with STEEM, BTS and EOS as one of the best.