Blockchain and Cryptocurrency Beginner - Money Management and Portfolio Management and Why They are so Important for Crypto Investment

When it comes to investing in cryptocurrency asset, there are some strategies that are considered so as to make the best investment decision and that is where money management comes in…

Money management is basically a financial strategy that determines how an investor or trader is going to invest funds into any cryptocurrency assets. This simply means that money management helps investors or traders segment their investment capital into parts so as to make the best use of the funds and better investments decisions on any cryptocurrency assets.

What money management does is that it determines when a trader is going to jump into a trade and make a purchase and also the quantity the trader is going to buy, and at what point should the trader decides to quit for the day. That way the trader learns and understands how to tolerate and be patient in the cryptocurrency market, using set rules and not based on emotional decisions in order to be in the best possible position.

Investing in any cryptocurrency asset can be tricky but it is very important to have a very good money management strategy. For me, the future plan is to utilize more the power and benefits of money management by dividing investment capital into segments or parts, probably about 4 parts so as to be in a better position to invest in different crypto assets. This is good because it helps to split the bulk capital into different investments, that way the risk can be reduced and also the success of one part of the investment can bring overall profit to the total capital invested.

Portfolio Management

Similar to what I explained about money management, Portfolio management is also another management strategy that helps investors make the most out of their investments or invested capital. Portfolio management is basically the act of managing different cryptocurrency assets that make up the investment portfolio. This is also diversification of the investment capitals into different cryptocurrency assets to make up a portfolio in order to strategically reduce risk and make the best use of investment capital.

In my opinion, after a certain investment capital is set aside for investment, it is better split the capital into different parts in order to diversify and spread the investment on different cryptocurrency assets. A cryptocurrency portfolio is made up of multiple cryptocurrency assets with a certain amount invested in each of the assets in the portfolio. It is also good to have a portfolio that is made up of cryptocurrency assets that fall under large marketcap assets, mid marketcap assets and low marketcap assets and risk capital assets.