Hi guys, I'm new to this and I'm just trying to get some research to make sure I don't end up tossing money away then, decide to jump off a building with a cinder block aorund my neck. So I understand a diverse portfolio is great, but how diverse should it be? 1-3? Or should I just indulge in my comfort limits? Any advice would help. Thanks in advance!
It is up to you. The diversification of your portfolio depends solely on you, as an investor. If you want 3 coins to invest your money, then feel free to do so, It is still a diversified investment. It depends to your ability to hodl a coin but If I were you I would hold at least 5 altcoins. If you don't want to end up tossing money away, research then do invest after if you are satisfied from the results. 
Topic: Diversity or Limit how many you use? (Read 154 times)
Most of time, I tend to not over-invest into something I don't fully understand. Even though the risks are already calculated, if I'm not confident enough to place some money onto something, I wouldn't do it. Sure it's better to diversify since it minimizes the risk of getting burned quickly, but if you don't know how to manage multiple assets at once, wouldn't that be even riskier to handle them all? At the end of the day, it is the capacity of the investor to manage his assets that will tell if he's ready to diversify his investments or not.
I have seen that it then past few month that it seems that cryptocurrencys are connected to each other. When one is falling, most are falling and opposit. And the interest of the coin (2. generation, 3. generation, bank lover ripple) has nearly no influence on that.
As someone has said, investing in multiple coins can't truly be considered diversifying. Crypto is very new and experimental, and all of them could simply collapse without warning. Diversifying is useless if it's all high risk lol. You can invest in as many as you want, for as long as you acknowledge that none of them are truly safe. They mostly all move in unison, too, so keep that in mind.
Hedging your investment basically means that you invest in currencies which are different from one another. Eg, invest in a segwit cryto and invest in a non segwit also. This means that if a certain architecture becomes obsolete (and the price of said crypto falls) then you wont lose as much investment.
It's about making money over the long term instead of investing everything in a pump and dump that 'might' go to the moon, but will probably fail.
It's about making money over the long term instead of investing everything in a pump and dump that 'might' go to the moon, but will probably fail.
Hi guys, I'm new to this and I'm just trying to get some research to make sure I don't end up tossing money away then, decide to jump off a building with a cinder block aorund my neck. So I understand a diverse portfolio is great, but how diverse should it be? 1-3? Or should I just indulge in my comfort limits? Any advice would help. Thanks in advance!
I personally would take what I can afford to loose per month or two and put this into one coin. Next time the same. So go on to 3 to 5 coins. Maybe start with 3. Then cycle through your coins with your invest. Read the news, check whats happen in the crypto world, stay calm if your assets going down.
But always do your own research what are you investing in! You wanne be investor and not gambler, right?
I always find it funny that people use the word "Investing", with cryptoCurrencies while in reality you are speculating on a currency. You buying the coin won't give you any influence over the people that mad it, (like the case is with normal stocks.)
Most of the coins other then Ethereum && maybe LTC and a few others ( although LTC currently with the low fees is also pretty useless) are currently (imo) very hyped up and nothing more then a whitepaper, the marketcap of these coins is extremely inflated and i feel like it's just a matter of time before some of these coins blow up ( in a negative way.).
Hi guys, I'm new to this and I'm just trying to get some research to make sure I don't end up tossing money away then, decide to jump off a building with a cinder block aorund my neck. So I understand a diverse portfolio is great, but how diverse should it be? 1-3? Or should I just indulge in my comfort limits? Any advice would help. Thanks in advance!
I personally would take what I can afford to loose per month or two and put this into one coin. Next time the same. So go on to 3 to 5 coins. Maybe start with 3. Then cycle through your coins with your invest. Read the news, check whats happen in the crypto world, stay calm if your assets going down.
But always do your own research what are you investing in! You wanne be investor and not gambler, right?
The thing with crypto currency is that they're all effectively the same thing at the very basic level... Ie. "Imaginery internet money" 
So, by holding various coins/tokens, you are not truly diversifying... Like you would if you held tech stocks, oil stocks, gold stocks & pharmaceutical stocks etc... if there is issues with oil, it likely won't affect tech or gold or pharmaceutical etc...
But with cryptocurrency, you effectively just hold a lot of "crypto stock"... Thus, when something "bad" happens in cryptoland, like a country banning crypto trading for instance, you tend to find the entire sector suffers.
Having said that, it is still possible to diversify within crypto to a certain extent, particularly in the case of different "tech"... such that an issue with ETH (massive hack) may not negatively affect BTC... And a contentious BTC fork may not negatively affect ETH etc...
Just do your due diligence, research the tech behind a coin... Avoid HYIPs... Don't buy into hype... And, of course, the golden rule "don't invest what you can't afford to lose".
So, by holding various coins/tokens, you are not truly diversifying... Like you would if you held tech stocks, oil stocks, gold stocks & pharmaceutical stocks etc... if there is issues with oil, it likely won't affect tech or gold or pharmaceutical etc...
But with cryptocurrency, you effectively just hold a lot of "crypto stock"... Thus, when something "bad" happens in cryptoland, like a country banning crypto trading for instance, you tend to find the entire sector suffers.
Having said that, it is still possible to diversify within crypto to a certain extent, particularly in the case of different "tech"... such that an issue with ETH (massive hack) may not negatively affect BTC... And a contentious BTC fork may not negatively affect ETH etc...
Just do your due diligence, research the tech behind a coin... Avoid HYIPs... Don't buy into hype... And, of course, the golden rule "don't invest what you can't afford to lose".
Hi guys, I'm new to this and I'm just trying to get some research to make sure I don't end up tossing money away then, decide to jump off a building with a cinder block aorund my neck. So I understand a diverse portfolio is great, but how diverse should it be? 1-3? Or should I just indulge in my comfort limits? Any advice would help. Thanks in advance!
Jump to: