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Author: Admin | 2025-04-27
Learn about what portfolio management is to help build a better crypto portfolio.One of the key skills to master as a crypto participant is careful portfolio management. Below we outline the key steps — from asset allocation to rebalancing and other important concepts like diversification and active versus passive management. This knowledge can help with selecting the best approach for one’s personal portfolio style.Key Takeaways:Portfolio management is the process of selecting and managing a group of investments to meet specific financial objectives and risk tolerance.The key steps in portfolio management typically are asset allocation, investment selection, trade execution, monitoring, and rebalancing.Other important concepts to know in portfolio management are diversification and active versus passive management.What Is Portfolio Management?Portfolio management is the process of selecting and managing a group of investments to meet specific financial objectives and risk tolerance. In crypto, this means selecting different tokens and coins. The expected return of the portfolio is a typical financial objective, and risk tolerance is the level of volatility that’s acceptable. Selecting the right mix of crypto assets for a portfolio, therefore, is important in order to achieve the desired return and risk tolerance.The key steps in portfolio management typically are asset allocation, investment selection, trade execution, monitoring, and rebalancing. Other important concepts include diversification and active versus passive management.Asset Allocation and Investment SelectionIf a portfolio consists of crypto and other asset classes (such as stocks and bonds), asset allocation determines how much of the portfolio is invested in each of the asset classes. The amount is also often referred to as the portfolio weight. On the other hand, if the portfolio is strictly crypto, then an investor considers the allocation to the different crypto categories — Layer-1, decentralised finance (DeFi), meme coins, and gaming-related tokens, for example. Once the broad categories are
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