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Five Ways to Protect your Cryptocurrency Portfolio at All Times

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portfolio risk

With cryptocurrency markets slipping, many investors want to protect their portfolios.  While stomach-churning downturns are the nature of the market, sit tight. The last thing you ever want to do in a pullback is panic-sell and damage your portfolio.

Here are some top tips to secure your portfolio if you’re just getting into the market.

Pointer No. 1 – Make sure your Portfolio is well diversified

“Putting all your retirement money into a single stock or one type of investment vehicle is considered unwise. If that investment goes south, you could lose everything. In general, financial experts recommend buying a mix of assets, or diversifying, because it’s nearly impossible to predict when a single stock will take off … or fail,” says CBS News.

A diversified portfolio can include large and small companies, different industries or sectors, U.S. and overseas securities, bonds, as well as cash.

Pointer No. 2 – Re-balance your Portfolio

According to the Bank of America, “Consistently re-balancing your portfolio can help protect you from trading based on emotions,” says Liersch. Re-balancing is about keeping your eye on the big picture.

These include your goals, your tolerance for risk, your investment time horizon and your liquidity needs. Therefore the fluctuations in the financial markets should not seduce or scare investors off.

Pointer No. 3 – Be Aware of Incessant Volatility to Protect Your Portfolio

The market is volatile by nature, from incredible highs to horrendous lows. Additionally, both current news and events influence this market. For example, if a coin announces a new partnership it can increase trust in the coin. Furthermore, if a country announces the implementation of new regulations for crypto businesses, prices can fall.

It’s essential that you are aware of exactly what’s happening with your investment.

Pointer No. 4 – Do your Own Research

Far too many of us buy or sell cryptocurrencies because everyone else does.  That’s like jumping off a bridge without looking because your friends did.  Don’t get caught up in the herd mentality.  Do your homework first and then consider dipping a toe in the water.

Without research, you’re just hoping and praying that something sticks. Ultimately the lack of research can damage your portfolio.

Pointer No. 5 – Be Well Aware of Scams

Moreover, hackers and fraudsters prey on cryptocurrency and blockchain investors. Being such a new space, lots of people are not overly knowledgeable about it. Therefore, it becomes easier for fraudsters to pull off their crimes.

During 2017, the cryptocurrency sector exploded in popularity. Vast sums of money entered the industry, with people looking to invest in anything and everything.

Stories about people investing in Bitcoin or an altcoin and becoming instant millionaires were common. This attracted a multitude of hopeful souls on a quest for a quick buck. These people were ideal targets for lurking fraudsters.

Unless you’re willing to do some due diligence and a good amount of research, don’t just invest your money.  Unfortunately, fraudulent schemes will continue.

That’s because crooks are greedy and do not care about you at all.  They want your money and will do whatever it takes to relieve you of it.

Therefore, in order to build a strong portfolio, beware of scammers and endeavors that sound too good to be true.



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