Good evening Hive-Chain World.
I will say something that many will disagree with. I truly believe that all markets, despite their randomness and chaos, are at points in time predictable. I believe that by following certain trends, studying market indicators, following developments in technology within industries and sectors, and listening to other experts engaging in similar behavior and sharing perspectives, we can pinpoint moments that go overlooked by many and for those willing to act, can reap the rewards.
I am excited to begin sharing my journey into crypto. I have been interested in finance and investments for the last several years first getting my feet wet in what I thought was volatile until coming here, weed stocks. I kept getting nudged into the crypto market because I knew I would be hooked, which I was succeeding with until my sales manager at work convinced me to pull the trigger right when Elon Musk walked out onto SNL.
Worst trade timing ever, but I have fallen in love with the volatility of the crypto market since.
I have no credentials other than my posts and my records, no shiny degrees, no formal education in finance and the only experience I have with investing is short-term weed stocks, to which I followed the trends of the market and generated 4x returns for myself. I have been wrong many times. I have lost money many more times than I have made money, but when I have made money, I have made more than enough to cover the losses.
Getting into crypto trading
Two nights ago I was approached by a future client with who I have been talking crypto with speculating since Elon Musk appeared on SNL and sent the market tumbling over the last few weeks. After a serious discussion about the details, we reached a point where he offered to fund the initial investment to get the ball rolling and take a risk.
In short, I have been presented with an opportunity to prove myself and put up or shut up.
What's the goal here?
The goal is to make enough money to quit my job and achieve freedom for myself and my family.
I intend to build a sustainable investment model that generates positive returns over time, then growing the size of the fund over time. In short, to make money with crypto.
My personal goal is to establish a portfolio based on sound logic and sound investment principles, not unlike traditional investment logic, while diversifying the risk across multiple types of holdings.
No portfolio is the same, but there are some common themes between the crypto market and the stock market.
Disclaimer
None of what I tell you is financial advice. I am not a financial advisor, I have no credentials, I have no claim to fame, and I make no guarantees that what I do will lead to positive results for you, my self or anyone else. I am doing what I believe is correct and having faith the actions I take will be positive in value. I Invest at your own risk and never invest more than you are comfortable losing.
Step 1 - Establish a clear portfolio diversification strategy.
A good rule of thumb I have come to understand is a split of 50/25/25
50% of the portfolio is in large-cap
25% of the portfolio is a mid-cap
25% of the portfolio is small-cap
**Step 2 - Establish clear criteria for classification
What is ___ cap?
This is informal for the market size of capitalization. Basically, if all the dollars invested in a coin is added together, the total value would end up falling into one of three categories
Large cap:
Coins that have a market capitalization of MORE than $10 billion
Examples of these are:
Bitcoin, Etherium, TetherMid cap:
Coins that have a market capitalization between $1 billion and $10 billion.
Examples of these are:
Monaro, Binance, and PolygonSmall-cap:
Coins that have a market capitalization of LESS than $1 billion
Examples are:
Icon, Ankr, and XinFin
We do this step to diversify the risk by allocating our assets according to the 50/25/25 rules, then again by selecting at least 3 plays in each cap in which to spread the assets.
The idea behind this step is that by betting a larger amount of our assets on the big players, we get a lower return than mid or small caps, but steady growth over time. This assumes that the big players will continue to be the big players and eat the smaller market cap coins over time.
The other half of the portfolio is split evenly between established but untested players and newcomers to the market.
This is where the mid-cap players that are growing will provide okay returns over time as some grow and some fizzle out, and the small-cap players that run hail marys with many failing but some succeeding spectacularly and more than making up for the failures.
I will be continuing my strategy and developments daily to keep people in the loop, but as I work a full-time job currently, I am restricted in my ability to do this until I have enough funds to step away from it.
Check-in tomorrow for my list of picks from each of the caps and my reasoning behind them. The idea is to have all of this done by Monday May 31st.
Let me know in the comments below what you think about this. If you think you have a great play that should be considered and why, comment below! I would love to hear more!