With BTC hitting cycle high, I think it is time to consider a portfolio rebalancing plan in preparation of the impending bull market, and of course the crash at some stage.
If there is anything I learned from the last cycle, it is to really consider what one's investment thesis is. It is more than a plan, it's supposed to be a robust plan.
Rebalancing the portfolio along the way to keep the risk/reward ratio optimal to align with one's investment thesis keeps one's investment safe.
Here is my general consideration.
If I have invested, say 10K into crypto, I need to decide what is the 12 month ROI I expect. Say, if I expect the ROI to be 20% per year, I should just put them in HBD saving. So come on, it should be more than that. Something like 2X could be suitable. That means, 300% from the 100% at the start.
Now, the different assets I hold would have different risk/reward profile. This is where I will need to decide to put X percentage in A, Y percentage in B, etc. The risk and reward will be differ. Basically, if the higher risk assets gains, I will be taking profits off it and put the gains into the lower risk assets.
Most importantly, as I do that along the way, I will keep a close eye on the overall percentage gain in relation to the year's target. If the target is reached within 12 months, a decision will have to be made about how much to invest in the next 12 month period. And of course, a need to set new ROI target, before I try to risk and repeat.
The advantage of doing this is that it is a simple enough strategy to adopt, and using it would prevent one from being lost in the heat of the market and silly FOMO moves!
In a nutshell, have a ROI target, and decide on the assets distribution, keep track, rebalance to lock in profits. Rinse and repeat.
P/S: This is not financial advice, and please do your own due diligence before investing.
@leofinance