| This is how a typical Core & Satellite arrangement looks. Some people choose to only have a Core, without wanting to spend time monitoring Satellites.
This approach is widely used by professional investors but all investors should do the same because it’s easy. It’s also an effective way to manage risk.
My Core forms the bulk of my portfolio, around 60-70%. Mainly set-and-forget ETFs and funds that just sit there, passively compounding over time.
My Satellites are 30-40%. Things like Options, Gold and Crypto. They require a bit more monitoring. Crypto is one of my smaller satellites …
Why not more than 5% in Crypto?
In contrast to stocks, Crypto has a short history, pays no income and is highly volatile – eg BTC lost 75% of its value in 2022.
Superfans think Crypto will one day replace fiat currencies like the Dollar and Pound. I don’t see that happening.
But, Crypto’s unpredictability is also my reason for owning it.
Some people believe BTC could go to $1m. But we could also make a plausible case for Zero. Which is why it’s a Satellite in my portfolio.
This is a new asset class and I want to remain open to the unknown – without trading in and out.
Managing the Risks …
If you’re going to invest in Crypto, make sure you do it properly. That means:
- Understand the historical volatility
- Manage your portfolio risks using a Core + Satellite approach
- Know about the platform risks
- Be aware of the security aspects of owning it
- Some coins will grow sustainably. But know that some are just honeytraps
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Our brand new Investment Academy in January now includes Live Crypto Training to guide you how to invest. And manage the risks listed above.
Proper and sensible training – delivered by our investment coaches with deeper Crypto knowledge than myself.
Like the rest of the Investment Academy, our aim is always to help you create a properly diversified portfolio with sustainable returns.
Always Remember:
- Time in the Markets always beats timing the markets
- Stay Diversified
- Minimise those leakages: Fees, Inflation, and Taxes
- Financial Markets are a great source of recurring income
- ETFs, Balanced Funds and Options achieve all the above
- Being educated helps you outperform 99% of the population
… to ensure your investments work for YOUR financial freedom (not someone else’s)
And …
For more guidance, our Investment Academy will help you implement all of this in a step-by-step way.
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Finally …
– Don’t take the above as advice as it may not apply to you personally
– Your Capital is at Risk
– You may not be covered by the FSCS
– Anything mentioned in a podcast or in a previous article was valid at that time and may not continue to be now |
