💰📈 A Strategic Cryptocurrency Portfolio - The 70% Core / 30% Play Money Approach (Updated V1.1) 📈💰

Hi fellow crypto enthusiasts!

It’s time for an update on my 70% Core / 30% Play Money Approach to a strategic cryptocurrency portfolio. Since the last time I posted this approach, I’ve made some tweaks and I want to share those with you. I didn’t change it radically, but I feel the changes help me to get a better return on investment, both in terms of money and time invested.

Okay, here we go…

The 70% Core / 30% Play Money Approach V1.1

The basic philosophy behind this portfolio approach is simple: a 70% ‘Core’ (long-term) segment and a 30% ‘Play Money’ (short-term) segment.

The ‘Core’ segment

Having this set of cryptos enables me to reap the benefits from a growing cryptocurrencies market without losing sleep over too much volatility. This segment holds projects that are based on different platforms and are focused on different problems or opportunities to create diversification.

• Investment period: Long-term (3+ months).
• Total value rule: Must be at least 70% of the total value of the portfolio.
• Number of cryptos rule: Maximum of 8 different cryptos at any given point in time.
• Platform concentration rule: Maximum of 3 cryptos that are based on the same platform.
• Rebalancing rule: Redefine ideal relative positions of holdings every four weeks and redistribute accordingly.

Other Core segment rules:

• Know as much as you can about these cryptos (team, community, primary focus, tech, roadmap, most important competitors, funding, business model).
• Make sure to keep yourself educated about recent and near future developments of these cryptos.
• When redistributing, ignore small deviations from ideal distribution to avoid unnecessary transaction costs.

The ‘Play Money’ segment

Having this segment in my portfolio allows me to enjoy the excitement of finding cryptos that might have the potential to outperform the Core segment at least in the short term. It allows for speculation but simultaneously prevents unlimited Fear-Of-Missing-Out (FOMO) buying behaviour.

• Investment period: Short-term (a few days up to 3 months).
• Total value rule: Can be maximum 30% of the total value of the portfolio.
• Number of cryptos rule: Maximum of 10 different cryptos at any given time.

Other Play Money segment rules:

• When adding a new crypto to this segment, the investment should at least be €300. This is to make sure that the potential profit is worthwhile the time invested in research.
• When making an investment, set a date in the future at which you will evaluate whether to keep the crypto in your portfolio or sell it. When the decision is to hold, set a new date to evaluate again. The evaluation date should not be further than 3 months in the future.
• When stepping out of a crypto, sell the full amount of coins/tokens you own. Use most of the money to strengthen the Core segment and use the rest for future Play Money investments.

That's it basically... :-)

To minimize discussion on technical details of specific cryptos, I did not include the specifics of the coin distribution within my Core portfolio. I do this in regular updates, like this one. Follow me to not miss out on those ;-)

I strongly believe in setting rules to force yourself to make decisions, in this case limited shelf space. Think about the owner of a small supermarket. He might only be able to sell 2 or 3 different brands per product group. Which brands will the supermarket owner choose to sell? He doesn’t have the space to stock 15 different brand of spaghetti or 12 brands of butter. He'll try to optimize for the space he has based on several factors, the most important one being profit per meter of shelf space…

The changes I made in my 70% / 30% approach were a result of a learning process and reading some interesting thoughts of other members here. A special thanks to @famunger and @skycornish, for sharing their thoughts in posts and comments on this beautiful platform!

Please share your thoughts on the approach I take in the comments below. I am always open feedback and like to be inspired by others!

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Disclaimer: I am not a financial advisor, trader or developer. I am just a crypto/blockchain enthusiast. Please do your own research, draw your own conclusions and do not invest any money that you cannot afford to lose.