You may recall the first principle of Warren Buffett: never lose money. It is
especially true for long-term investment as the most important thing here is to
keep the money, not to lose it.
Let’s outline the main principles of making a long-term investment:
Do not lose money; reduce risks
Do not make a fuss
Reap benefit in future
This is how your cryptocurrency portfolio should look like for making longterm
The blue color is used to indicate more moderate and stable positions, which can
be less profitable. The green color shows more risky yet more promising
positions. Blue coins are the currently more stable currency.
Why do we mark this currency blue? We do so because there is a strong
possibility this currency will grow in value. Bitcoin takes a leading position here
as it is still considered to be the most reliable currency. Besides, its price will
only grow. Why am I so confident? Here is my answer:
The entire cryptocurrency turnover is now carried out
This currency is accepted everywhere
Swift development of the project and the system as a
The dollar is also marked in blue because you should always have “quick”
money in your portfolio, with which you can operate quickly and exchange for
Now let’s look at the green coins in the portfolio.
If the previous currency can be viewed as almost unwaveringly stable, then the
situation with green coins is constantly changing. The currency on the green list
looks risky at the time of writing this book. However, keep in mind that
everything can change the day you read this.
Judging from my observations, the formation of a portfolio depends on a
person’s age. Is it strange? Not at all! The younger you are, the riskier your
investment portfolio can be. We do not mind being on thin ice when we are
young, but the older we get, the less we can take risks.
What else influences your investment portfolio besides age? The size of your
capital. If you have a lot of capital to invest, it’s easy to calmly risk a small sum
of money. But the more money you have, the more stable your strategy should
The last factor that influences the formation of your portfolio is the size of your
financial cushion. If it is small, then it is better to reduce risks.
At the same time, trite as it may sound, I want to recall one more basic investing
adage: buy low, sell high! When the coin price tumbles, it is often the best time
to buy it. But at this very moment, we start to feel greedy, thinking the price of a
coin may drop even lower.
This problem is solved by applying a “moving average” strategy. It can be
simple or exponential.
Let’s look at this example of simple moving average.
For example, you are very interested in a coin that costs $100. One fine morning,
while drinking your coffee, you decide to buy 14 such coins. So you spend
$1,400. In a couple of weeks, the coin price reaches $105. You sell these 14
coins for $105, getting $1,470. You have earned $70 in profit.
But what if you decide to buy these 14 coins, not at once, but one coin a week?
It seems the chart has not changed. However, in one case, an average coin price
is $100, and in another case, the price is $91. Accordingly, in the second case,
you spend $1,274 on 14 coins and sell each of them at the same price as in the
previous chart. Your profit is $196. How did that happen? We just chose a
different approach to the situation.
In applying a simple moving average strategy, you do not need to constantly
look for the perfect moment to enter the market or be afraid that the rate will
plunge even lower. You just buy a certain amount of currency every month. You
keep buying whether the market falls or grows. In fact, this strategy is very
hackneyed but truly efficient for long-term investment.
In general, the simple moving average strategy allows:
reducing the average price of purchase;
buying more shares for the same money;
reducing losses in the falls and emerging from losses
more quickly on the rise.
Now I suggest considering exponential moving average strategy.
The exponential moving average strategy allows the increase of your profits.
Here everything works this way: when the price stays straight or goes up, make
the usual purchase; when the rate goes down, you buy some more.
It is worth noting you can also use this method for short-term investment. Here
you expect a coin’s price to grow in the near future and then sell them. When
using this strategy, I recommend paying attention to altcoins, especially those in
the formation stage.
It is very important to take profit in the short-term strategy. For this, I
recommend using the 50/50 strategy. Suppose you buy a coin for $1.50. Later,
its price reaches $3, and you sell 50% of a coin and break even. Everything is
Let me give you a few tips.
If you are a fan of stability over risk, then give preference to coins that initially
cost more. And if you dream of potentially explosive profits, then pay attention
to cheap coins. The biggest profit is made on cents. After all, no one will argue
that $1 will grow tenfold much faster than $100.
Finally, remember that the cryptocurrency market is constantly changing.
Therefore, you need to monitor your investments hourly to stay up to date and
make wise decisions.