With the digital markets approaching a bull market, it seems like the time has come to focus on a safer investment strategy. In a time of high volatility and rapid fluctuations, the option of portfolio adjustment appears as a pivotal concept, preferable to adopting it instead of entering into rapid and risky trades.
The digital market is expected to witness a strong upward trend after a long period of decline, but predicting the exact timing of this rise remains a dilemma for investors. This is where portfolio adjustment or “cyclical balancing” comes in, a procedure that aims to distribute digital assets and reshape the portfolio in a way that supports the investor’s goals and reduces potential risks. Unlike fast trading, portfolio adjustment enhances the stability of investments, especially in light of high volatility.
Why is it better to adjust the portfolio in the pre-rise period?
1. Reduce risk and increase security
When trying to make quick gains through trading, investors are exposed to great risks that can result in huge losses. In contrast, portfolio discipline allows assets to be distributed between strong and stable currencies and promising currencies, ensuring diversification that mitigates the impact of any sudden decline.
2. Benefit from stable market movements
Portfolio adjustment involves buying when cryptocurrency prices are low or stable, with the goal of smoothing out the average price over the long term. This allows the investor to enter the market at low price levels and make greater profits when prices rise.
3. Achieving long-term strategies
Portfolio discipline allows investors to create strategies that generate greater returns over time. Instead of focusing on quick profits from short-term, often volatile trades, investors can benefit from long-term investment strategies that consistently grow capital.
How to set up a wallet?
Portfolio management is a process that requires setting clear criteria for asset allocation based on several factors, including market value, stability, and currency flexibility in the market. Some steps that can be taken include:
Asset distribution by category
Distributing capital between large, stable cryptocurrencies such as Bitcoin and Ethereum, and emerging currencies with promising potential, with a limited portion allocated to high-risk currencies.
Periodic update of the wallet
To ensure permanent balance, the portfolio should be reviewed periodically, evaluating the performance of individual assets, identifying currencies that have underperformed versus those that have shown growth, allowing changes to be made to enhance the stability of the portfolio.
Allocate capital according to personal goals
Investors should clearly define their financial goals and allocate capital to achieve them, in line with their risk tolerance. The goal may be to achieve stable returns over the long term, avoid large losses, or even enter into promising opportunities for higher growth.
Portfolio Control Strategy and Its Role in Avoiding Trading Risks
Historical analysis of digital markets shows that short trading can be risky due to high volatility, as digital market movements can be sudden and unpredictable. Here, investors can rely on portfolio adjustment to avoid losses resulting from wrong decisions due to sudden market fluctuations.
While some see the pre-upturn period as the ideal time to accelerate trading, the more cautious prefer to focus on building a strong portfolio that can withstand volatility and benefit from potential future growth.
Bottom line
Building a strong and balanced portfolio by adjusting digital assets at the right time can be the smartest move for investors who want to benefit from the upcoming bull run without taking unnecessary risks. Striking the right balance between stable assets and promising currencies can put investors in a better position to achieve long-term profits.
While high volatility tempts some to look for quick profits, it is becoming increasingly clear that adjusting the portfolio and regularly re-evaluating assets may be a more successful strategy, enabling the investor to overcome risks and reach the expected profits when the digital market rises.