Quite simply, a digital currency portfolio is an empty basket that you fill with your assets. A portfolio is actually a list of your assets that you have collected for investment purposes. These assets may be digital currency, stocks, NFTs or any other tradable asset.
We provided a simple and short definition, but now what is the purpose of this portfolio and why should we create a portfolio of digital currency assets. Join us to give short and simple answers to all these questions together.
What is a digital currency portfolio?
Before going to use the portfolio application of Erzdigital, we must know what a portfolio is. According to the definition of Investopedia, a portfolio is a set of assets that a person has invested in.
Let’s put the concept of portfolio with an example; Suppose you have 1 bitcoin, 2 ethereum and 2 million shiba ino and you keep these currencies in your wallet or your account in the exchange. This means that your investment portfolio includes Bitcoin, Ethereum and Shiba Inos, each of which has filled a share of this portfolio.
In fact, as the name suggests, a portfolio is a basket that you fill with your assets.
The concept of portfolio is not specific to digital currencies. That means you can have stocks, digital currency, NFT and any other tradable asset in your asset portfolio.
Don’t forget that a portfolio is a list of your assets that you put in your trading basket with the intention of investing and trading. In fact, you have made a portfolio by buying a small stock!
In order for your portfolio or portfolio of assets to be profitable and to be able to earn money using it, you need to consider various things, which we will briefly mention each of them.
Portfolio diversification
I will tell you the point that you should pay attention to with a famous proverb in the investment world: never put all your eggs in one basket! This means don’t fill your portfolio with Steelcoin, Bitcoin, Ethereum or a specific coin.
Suppose you plan to create a digital currency portfolio and you have allocated 10 million Tomans of capital to this task. Most likely, the first thing that comes to your mind is to buy Bitcoin, buy Tether or buy new currencies. It means you buy 10 million Tomans of a certain currency.
Read more: Investment portfolio diversification guide
This is very wrong; Because you have limited your profit to the increase in the price of a particular asset, and the possibility of a huge loss increases. We suggest that you use asset portfolio diversification techniques.
Instead of investing in a single asset, build a portfolio of stocks, various cryptocurrencies and NFTs. For example, you can buy 20% of your capital in Tether, buy half of it in Bitcoin, and split the rest between stocks and NFTs.
In this case, your profits will be more reasonable and accessible, and you will somehow control your losses. For example, if the stock market stagnates, your digital currency and if the NFT market and the digital currency market in general fall, your stock will still have a normal course.
Another thing to remember in diversifying your portfolio is not to limit yourself to a specific area. Your investment portfolio can contain digital currency, stocks, and cash!
Cash can be in the form of dollars or rials, the important thing is that you can.
Balancing the asset portfolio
Review your asset portfolio at specific intervals. Remove your dead or zombie assets from the basket and replace them with new assets. Of course, this issue seems simple on paper, and in fact, it is the most important and hardest part of portfolio maintenance.
Which assets to exit and which assets to keep depends on your trading strategy, trading and investment style, and many other factors. For example, if you bought Bitcoin for a long-term investment and lose a week, it doesn’t make sense to sell it and move to another asset.
Portfolio balancing is a very specialized topic, and in another article, we will go over the things you need to consider in more detail.
Types of investment portfolio
In general, portfolios or investment portfolios can be divided into five general categories: hybrid portfolios, aggressive portfolios, defensive portfolios, income portfolios, and speculative portfolios. In the following, we will briefly explain each of these portfolios.
Hybrid Portfolio
A hybrid portfolio is a portfolio that includes low-risk assets and high-risk assets. In these investment portfolios, there are also assets that have a high risk-to-reward ratio.
On the other hand, there are assets that have a fixed income. For example, if an investment portfolio has both deposits and high-risk digital currencies, it can be said that this portfolio is of a hybrid type.
Aggressive portfolios
In these portfolios, the focus is on high-risk assets that have high returns. In these portfolios, the probability of loss is high, but on the other hand, more profit will be earned by the investor.
Investors who use aggressive portfolios have a higher risk tolerance; Because their portfolio assets are subject to further fall.
For example, if a portfolio includes stocks of start-up companies, new digital currencies and such assets, it is aggressive.
Defensive portfolios
As it is clear from the name of this portfolio, it includes low risk assets. Most defensive portfolios include stocks of companies that work on essential commodities. These stocks have a reasonable profit in the fall of the stock market and the jump of this market.
Generally, it is not customary to use these portfolios in the digital currency market; Because Bitcoin, which is the largest and oldest digital currency, is not immune to falling.
Income Portfolios
These types of investment portfolios are used to provide a relatively fixed income for investment. Investing in real estate market funds, securities, and specific portfolio stocks generate income.
Speculative portfolios
These portfolios have assets in them that provide good profits to the investor in the short term. The use of digital currencies in these portfolios is more than other types of baskets.
Training on making a digital currency investment portfolio
Building an investment portfolio in digital currencies seems like an easy task, but it has its own challenges and nuances. In the following, we will tell you some tips so that you can complete and build your investment portfolio better and with a more open vision.
Know the market
The first and most important step in building a suitable and profitable investment portfolio in the digital currency market Market knowledge Is. First of all, you need to know the digital currency market in order to invest in it.
Fortunately, you have come to the right place. As the number one source of the digital currency market in Iran, AruzDigital has provided any type of training at any level you want. If you are a beginner, we strongly recommend to see the courses of Digital Currency Academy to enter the digital currency market, and if you have a more advanced level, we suggest to see more specialized courses such as investing in Metaverse and NFT.
If you browse through the digital currency website, you will find hundreds of articles at different levels that will help you to purposefully build a portfolio. In fact, digital currency is a complete resource for learning the digital currency market.
Analyze a currency before adding it to your portfolio
If you have followed the Arzdigital webinars, we have always placed a special emphasis on project research. You need to know the ins and outs of a project to be sure to add it to your investment portfolio.
A project can be checked from different aspects. For example, the production team, the technology behind it, the news surrounding it and dozens of other things are among the things that you should check before investing and buying digital currencies.
Finally, draw a conclusion using the collected data. The fact is that investing blindly in the digital currency market increases the probability of losing. Do not forget that the digital currency market is not like the stock market where losses and profits are controlled by a higher authority. There are thousands of operators in this market whose capitals are lost overnight. So prevent these incidents with proper research.
Have your own trading personality
One of the mistakes that new investors make in the market is that they ask their friends and acquaintances for help in investing. The fact is that each person’s portfolio can be different depending on the type of trade and investment and personality characteristics of people.
For example, if you are not a risk-taker and are prone to FOMO and FUD, using high-risk digital currencies in your portfolio will cause mental conflicts and emotional decisions. If you are not familiar with these terms, we suggest you read the “What is FOMO” articles.
When you make an investment portfolio according to your morals and qualities, you will definitely get a better result. Further, by becoming more professional in the digital currency market, you will have more control over your emotions and you can go to other styles of investment and trading.
So, for the initial period, start trading and investing in the market Trade based on your personality!
The best portfolio app
Without a cryptocurrency portfolio app, it’s a nightmare to keep track of how much cryptocurrency you have right now. Let’s say your friend asks you how much money you have in your portfolio, if you don’t use a portfolio, first you need to enter the exchange account and bring a calculator, count your currencies grain by grain and finally multiply by the dollar price!
Now an easier solution: using portfolio programs!
Digital currency portfolio
Using digital currency portfolio is the most straightforward way to manage and track your investment portfolio. It is possible to add several thousand tokens and digital currency in the digital currency application.
Inside this program, you can create a large number of portfolios by adding purchase price, sale price, asset type and such information. In the end, just open the digital currency application and monitor the changes of your assets at a glance.
For this, you just need to install the latest version of the digital currency program, log in to your account, create an asset portfolio, and you’re done.
The use of investment portfolios or portfolios is different. The first and most important function of a portfolio is to organize your investments. In fact, you can see at a glance how many tradable assets you have, when you bought them, how much profit or loss you have made since you bought them, and a feature that is perhaps not taken too seriously is that you can share this portfolio with other people. share it!
Training on how to make an investment portfolio in the digital currency program
First, log in to your account in the application. To do this, after opening the digital currency application, click on the profile option and enter your account. If you don’t have an account, you can easily create one by entering your phone number.
After logging in to your account, click on the portfolio option and then click on “Add Transaction”.
In the next step, choose the currency you want to add to the portfolio. In this example, I chose Bitcoin. Enter the amount of bitcoins you have in your wallet and the purchase price. By default, this box shows the current price of Bitcoin.
After this step, click on “Add Purchase Transaction”.
Your portfolio is created! Now, every time you visit this section, you will see the amount of assets and their Rial value.
If you have sold a currency, just record a “Sell” transaction in the portfolio. The system will automatically register and apply the changes according to your selling price.
Frequently asked questions
A cryptocurrency portfolio is a list of tradable assets that a user invests in.
Digital currency program is the best program for creating, monitoring and tracking digital currency portfolio, which supports all digital currencies in the market.
Diversification is the process by which the user puts different asset classes in his investment portfolio in order to limit possible losses.
Conclusion
In this article, we learned what a portfolio is, why we should have a portfolio, and how to use a suitable program to track the assets of our investment portfolio.
To recap all of the above: A portfolio is a list of tradable assets that you buy and sell for the purpose of investing and trading.
To build a proper portfolio, you need to take several steps. For example, you should use techniques such as portfolio diversification. Diversification means don’t put all your capital on one asset and use different assets with specific shares in your portfolio.
Finally, when you have made your decision to build a portfolio, you can take help from programs like Urzdigital application to track and monitor your portfolio assets.
These programs are mostly free and you will not need to pay any amount.
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