Multiple Cryptos Doesn't Necessarily Mean Your Portfolio is Diversified

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There is a difference between being an investor and a gambler if you know what you're doing. It's obligatory to note that a truly diversified portfolio contains more than just cryptocurrencies. Now that's we've established that, let's talk coins. It's a fairly common misconception that owning multiple cryptocurrencies means you have a diverse portfolio to protect your investment. It's simply not true. There are many factors for having a diverse portfolio (I'm sure others will elaborate in the comments), but one important factor is to invest in coins with a range of risk factors.

A standard investment portfolio contains both equities and bonds. It's known that bonds are safer, but offer lower returns than equities. Cryptocurrencies are similar to this in that there are fewer risks involved with established coins like Bitcoin or Ethereum. However, lesser known altoins (while riskier) can build up to some amazing payouts. The best portfolios contain BTC and/or ETH, somewhat established coins, and more obscure ICOs (some of which I cover in other pieces). The riskier the cryptocurrency, the less percent of your total investments you want to invest in it, depending on how risk-adverse you are.

This is an example of how one might break up the % for each type of coin in their portfolio:
diversified portfolio example.png

A few other factors to consider:
Do you want to focus on cryptos that are anonymous (XMR, ZEC, etc.)?
Are you more interested in centralized platforms (NEO, XRP, etc.)?
Do you like completely original coins or those based off of an established network?

We're all likely to disagree and what the perfect coin combo is (tell me yours below!), but there is one we can all agree on: STEEM!

If you liked this piece, you may also like:
"ICO Analysis: CHILL"
https://steemit.com/cryptocurrency/@kylie-steem/ico-analysis-chill
OR
"WordPress Now Allows You to Accept Payments in Bitcoin"
https://steemit.com/cryptocurrency/@kylie-steem/wordpress-now-allows-you-to-accept-payments-in-bitcoin

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