In compiling a good portfolio, especially for beginners, three things need to be considered: budgeting, screening, and tracking. What do these three days mean? More in the following article.
Budget
This is the first step needed when starting a crypto investment; with this budgeting, investors will know what percentage of the funds they have to allocate into crypto. Allocation is important because when investment is needed initial funds, the greater the capital, the greater the possibility of profit.
An example is when you buy Bitcoin with an initial capital of 1000 dollars. Then Bitcoin goes up 500%, then the profit you get is $ 5000. However, if your initial capital is Rp. $10000, with the same percentage increase, your profit will be $10000.
Keep in mind that you have to use cold money for this allocation, which is money that you are willing to lose. Because any investment certainly has risks, therefore using cold money will be safer if you experience losses and will not interfere with your daily life.
The allocation of funds for this crypto investment can be adjusted according to income and needs. The majority suggest allocating 5% of income. Still part of budgeting, you have to do risk management.
Here you can determine whether you want to be a long-term trader or a position trader that adapts to market conditions; every choice you make will determine the investment journey you make.
Screening
The second step is to do a screening which is an activity to compile crypto. Suppose you want to be a long-term investor. In that case, you need to understand fundamental analysis, which you can easily find on the internet or Youtube, which shows the fundamentals of various crypto assets.
If you want to be a long-term investor, you need to trust the crypto assets you buy. Apart from the fundamentals, it is important to know the price history, such as the asset’s performance in recent years. You can see about the decrease and increase in price, is it still within reasonable limits or vice versa?
Reflecting on Bitcoin, where the fluctuation is relatively small, the correction is around 20% to 50%. Still, when it rises, it can be up to 200% or even 1000%. You can use Bitcoin as a natural reference for crypto fluctuations. Because apart from Bitcoin fluctuations or ups and downs, the price is higher.
Still part of the screening, the next step is to diversify or spread funds to several different assets. This diversification is important because if one asset goes down, other assets can cover the loss.
Two ways can be used for this diversification, first choose the crypto that will be the security, generally Bitcoin and Ethereum, which have been tested for price.
Next, choose high-risk crypto to look for profits, this type of crypto can make you big profits, but there are also big losses that could happen. Because it is important to have crypto security that can cover losses, for example, this high-risk crypto does not profit.
Tracking
When you have bought crypto assets and have diversified, it’s time for the last step, namely tracking to track or monitor portfolios. This is an optional step, but it’s a good thing to do to find out if your investment is losing or winning.
This tracking is quite easy to do, one of which is with the help of applications such as Blockfolio. You can monitor regularly but not too often because monitoring the market excessively can make stress and investment unpleasant.
Those are three ways to be applied for those of you who want to compile the right portfolio. The method above can be adjusted according to the needs and desires of each investor.