How to build your first Cedefihedge portfolio
How do you build a well-balanced portfolio on CedefiHedge? Diversifying your assets is one of the most important things when investing and this goes for using on-chain asset management as well. There are lots of funds and staking pools on CedefiHedge that have more potential for growth that could give you far greater returns in the long run. Although on-chain trading algorithms (funds) and staking pools in cryptocurrency can be a great way to profit from the many opportunities in the crypto market, the basic principles of asset allocation and diversification still come into play when you build a solid portfolio.
By investing in different funds and staking pools, you can set an asset allocation that reflects the amount of risk you’re comfortable with, and the potential gains you’re hoping to achieve to reach your financial goals.
Any investor considering the use of on-chain trading algorithms and staking pools to maximize the profits from their crypto assets would be wise to remember that even as crypto usage becomes more popular, it can still be a very volatile investment. This fact should be top-of-mind as you create a balanced portfolio because unlike a traditional investment portfolio a crypto portfolio contains a single asset class that has a higher risk profile overall.
With that in mind, you can consider different types of funds for portfolio diversification, which helps to manage risk. Funds on Cedefihedge have risk factors attached to them which are calculated with probability computation, Investors can look at those risk factors to know the amount of risk that comes with investing your crypto assets in a fund.
All it takes to start building a portfolio on Cedefihedge get is simply diversifying your investments among different funds and staking pools.
Things you should consider before selecting a pool;
Pool Manager: A pool manager is a person or company that manages investments on behalf of investors.
Performance: The average daily performance of a trading strategy is found by calculating the percentage of winning trades against losing trades on any day. This information can be used by an investor to know how much a strategy could potentially yield.
Lifetime returns: Lifetime returns are the percentage return earned by the strategy since its creation.
Account type: This indicates the type of investor account the pool allows.
Performance charts: This is a chart illustrating the performance of the strategy over some time.
Strategy Description and Illustration: This is a detailed description and illustration of how the strategy works. You can read the description to understand the mechanics behind a strategy.
Management fee: This is the fee charged by the pool manager on the profits generated by the strategy.
Portfolios: This is a breakdown of digital assets that make up the strategy.
Trade history: A history of the trades carried out by the strategy.
How to build a well-balanced crypto portfolio.
Each investor or trader will have their ideas on what makes a well-balanced crypto portfolio. But, there are some general rules worth considering:
1. Split your portfolio between high, medium, and low-risk pools and give them appropriate weightings. A portfolio containing a large portion of high-risk investments is not balanced. It might have the chance to provide you with bigger gains but may also cause huge losses. Your risk profile will determine what’s best for you, but there should be some mix.
2. Consider investing in staking pools to help provide liquidity for your portfolio. Staking pools are the key to many Defi platforms and can help you quickly and easily lock in gains.
3. Rebalance your portfolio if needed. The crypto market is very volatile, and your decisions should change depending on the current situation.
4. Allocate new capital strategically to avoid overweighting any one area of your portfolio. If you’ve made big gains recently from one fund, it can be tempting to pump in more money. Don’t let greed interfere, and think about where you can better place the money.
Diversification is a great risk management strategy that many investors use in both crypto and traditional assets. While it will not protect you from a market-wide correction or a bearish cycle, it will reduce your risk if one of your portfolio assets exits the crypto market or has a poor run. As a result, keep in mind that investing is risky, but risks can be managed to some extent. You can significantly reduce the impact of global slashing events on your portfolio by making smarter investments. Examine your portfolio to see if it needs to be diversified. If it does, make the wise decision to implement a diversification strategy that works for you.