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06. Common Mistakes Uncategorized

Failing to maintain balance

Successful traders maintain a balanced portfolio. Personally, I only have 10% of my wealth in crypto. Within my crypto portfolio, 70% is long term holds (heavily weighted to Bitcoin), with 15% in cash and 15% for trading. I only trade with 15% of my portfolio and that portfolio as a whole is only 10% of my net worth. 

Rebalancing is the process of returning your portfolio to its target asset allocation as outlined in your investment plan. Rebalancing is difficult because it may force you to sell the asset class that is performing well and buy more of your worst-performing asset class. This contrarian action is very difficult for many novice investors.

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