Many new investors lose money because they do not know how to diversify their portfolio. Warren Buffett always has an unmistakable investment principle of "Never put all egg in a basket" that implies diversification of the portfolio. Many investors spend the money they have to invest in one or two coin and expect to make a good return. Investing in financial markets, if you consider this to be a long game, should eliminate the thought of losing once because in order to survive long in the financial markets, it is imperative for every individual to govern. Imagine what would happen if you did not get lucky, you could lose six months to one year to get your money back and you could never get it back. It is true that diversification of the portfolio will bring little profit but small stable earnings in the long run will bring a significant amount of money.
Here's how to diversify my portfolio.
Bitcoin/Ethereum ( 30% - 40% )
Bitcoin and Ethereum are two of the largest in the market today and because of their large capitalization, the volatility will be lower than the rest of the market and the risk is also the lowest in the market. In my opinion, you should invest 30-40% of your capital to invest in Bitcoin or Ethereum. It may not be profitable in the short run, but with the current potential of the Crypto market in the times Long term is quite promising.
Altcoins and others (60-70%)
Investing in good Altcoin projects is the quickest way to raise your return on investment. Most of the Altcoin capitalization is very low and there are many potential projects that have not been discovered yet, so they are going to grow very fast and bring more profit for investors. However investing in Altcoin we also have to diversify not just invest in a certain Altcoin.
Large capitalization (20% - 30%)
This is the top 25 most capitalized stocks in the market such as NEO, Cardano, BNB, etc. These will be less risky and if you are a risky investor you want to limit risk further. can increase the amount of money invested in this kind. You can expect profit x2 x3 in medium and long term.
Market capitalization and volume (10-20%)
This will include coin in the top 100 markets. These coin have a moderate risk, but the profits are quite good. If you are a risk lover, you can increase your investment in this type. These types of coin you can expect profit from x5 to x10 if hold long term.
Small capitalization and volume (10%)
This is the most risky type in the market and this is also the most pump and dump coin because of capitalization and very small volume so the sharks can be easily controlled. In my opinion, if you are a risk taker and like to surf, you can increase your investment in this kind of best, maximum of 15%, do not invest more. When investing in these coin you can expect x5 x10 in a short time or higher in the long run if this is a potential project.
Intial Coin Offering (5-10%)
This is quite different from the rest. It can be said that the last few months of 2017 are the boom period of the ICO, at which time you can choose a great project and collect a lot of money. But now it is no longer pink. Investing in ICO projects is risky because they are all on the paper and have not been implemented so you can make a lot of money if the original project succeeds in your product. Or vice versa, you can also lose money because the project fails or simply opens the project for fraudulent purpose and will never have the product. So be very careful with ICO projects.
The rest (5%)
You can spend a small amount of money investing in multi-level coin or lending coin platforms. This is actually a risky investment and to help you understand the market because the risk is very high but if your profit luck will also be very high.
Always keep in mind that: Profit comes with risk. It does not matter how much money you earn, how important you earn in how long.
Wishing everyone a successful investment!