Portfolio Allocation

Crypto Portfolio Allocation - What is your approach?


Two-and-a-half weeks into crypto and I've already experienced my first crash - wahoo!  In the early stages of learning about crypto, my analytical mind is continually shifting to what sort of strategy to take.  There are two major competing ideas floating around in my brain, a long-term holding strategy or a short-term pick the hot crypto strategy.  But which one to take?

I've always taken a long-term approach to things.  It all started as a young boy when I deposited his first bit of money into a local bank.  Giving someone else my money seemed like a big mistake until I received my first savings account statement.  How did my deposit grow by a few pennies.  It was a magical thing called "interest" and for the first time I saw how my money made more money.  I was hooked!

I bought my first house in my 20's (I'm 54 now) with long-term price appreciation as the main goal.  Unlike others, I did not look at a few houses and buy on emotion, but rather spent months learning the area and narrowing down on a strategy.  I had moved to the Dallas area as a young single guy and through the process decided on a few key ideas.  One, suburban sprawl was moving primarily to the north so that is where I should focus.  Two, lake properties were in very short supply in addition to decent sized yards.  Three, it also had to fit into my future family plans which ended up being a wife and two boys sometime later.  I ended up choosing a small town called Frisco with under 10K residents and one high school in the mid 90's.  I found a newly built 3-bedroom, 2 bath house situated on about an acre of land that backs up to Lake Lewisville for $154K.  Frisco now boosts over 200K people and 11 high schools with this same property worth many, many multiples of the original price. 

It was the same with investments.  I started with a 401k account in my early 20's then added an investment account with Charles Schwab.  Through a number of jobs I've added another three 401ks along with 529 plans for both my sons and a Roth IRA.  Thing is, I just accumulate investments and never sell.  That will have to change in a few years when my son's head off to college.  It is a strategy that has served me very well as I was able to retire early with no debt, future college expenses covered, retirement well funded, etc.  I'd advise it to anyone but it can be boring only checking my investments once a year (January 1).

But with crytpo, should I take the same approach?  As of now I'm not investing in crypto, but rather gathering (some may call it hording) it through approaches like mining and other methods of gaining this exciting digital currency. 

 As I'm early in the process my pre-wired brain is wanting to just gather as much crypto as possible.  I find there is a bit of an emotional connection to each crypto coin or token I hold.  I didn't know what Ravencoin was three weeks ago but now that I'm mining it I'm happy to talk to anyone about it.  

One of the beautiful things about crypto is you can take a long-term approach and still be very aggressive.  You can shoot for the moon, or safemoon perhaps, but focusing on some of the lesser known (or lower market cap) coins.  In investing I was always focused on portfolio allocations, the same strategy applies here.  In stocks, you build around large cap (Dow Jones / S&P) first and I'm thinking that equates to BitCoin (BTC) and Ethereum (ETH) so there will be a focus here early on.  Then for higher growth you look at mid-caps, smaller companies and international stocks.  With thousands of crypto currencies out there, many options exist to go for big gains and herein lies the future fun...

Unlike my stock investments, I haven't settled in on a crypto portfolio allocation strategy yet but I'd love to hear how you approach this.  I'm interested if you have targeted allocations and if you rebalance at all.  Are you into many cryptos or are you focused on just a few of the larger ones or do you have a gamblers mentality and putting your eggs in one basket hoping to strike it rich?  I'm also curios what percentage of your overall investments is dedicated to crypto? Please leave a comment below to let me know your general strategy and thanks in advance for sharing.

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CryptoMasterMiner
CryptoMasterMiner

DeFi Yield Farmer Liquidity Provider Crypto Lender, Miner, Investor & Blogger


Journey through Crypto, from Newbie to ???
Journey through Crypto, from Newbie to ???

Born in England, raised and educated in Michigan (Go Spartans), now living in Texas. Retired early after doing well in the markets and now turning my attention to another type of investment. Follow one man's journey into the world of crypto and let's learn from each other...

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