As many investors have learned the hard way, if you build too heavy a portfolio in one type of asset class, no matter how diversified you think you are, it won’t be enough when the macro environment turns risky.
Extreme care should be taken in developing a risk-averse trading strategy and portfolio. However, how to go about it often overwhelms investors of any experience level.
A trading platform like PrimeXBT, with a selection from a list consisting of over 100 of the world’s most traded markets today, makes complex work a little easier and a lot less stressful. Read on to find out how PrimeXBT helps demystify trading portfolio diversification, as well as some key strategies on how to stay profitable and reduce risk in today’s global macro environment.
How the Post-Pandemic Bubble Left Crypto Traders in Danger
Post-pandemic, risk-free credit and capital became commonplace, causing stocks, cryptocurrencies, and other risky assets to reach extreme valuations in a short period of time. Stimulus money blinded investors with greed, forgetting the underlying impact on the economy and the supply chain.
Investors who have been sucked into the bubble have often loaded up on meme stocks, Bitcoin, and altcoins. But when the macro environment geared towards unrest, war, inflation, etc., risky assets fell faster than investors could profit from them.
A cascading effect of panic took the price of Bitcoin, Ethereum, and altcoins down 70-90% across the board. The downward price spiral has caused mass liquidations of institutions and forced margin calls on crypto hedge funds. Any investor who was heavy on crypto or the stock market may have suffered a huge loss.
Many PrimeXBT traders have weathered the storm better than others thanks to a host of ways to diversify risk in a portfolio. PrimeXBT traders were able to take advantage of the shorts, but this is only a small piece of the puzzle.
How a risk-averse portfolio can keep traders profitable
Luckily for PrimeXBT traders, platform users have access to over 100 different trading instruments to choose from to build a rock-solid portfolio. Staying away from risky assets also involves upside risk – the risk of missing out. Rather than exiting the markets entirely or moving into cash, PrimeXBT traders can hedge spot positions with short positions in the same asset class or trade between long and short positions as appropriate.
PrimeXBT offers traditional assets in addition to crypto, so crypto traders could have remained profitable by taking positions in oil and natural gas while the energy sector pumped or hedged with bullish-resistant assets. inflation like gold and silver. There are also stock indices and forex currencies of major economies around the world. The massive mix of assets reacts differently to macroeconomic conditions, allowing investors and traders to reduce risk and increase profit potential at the same time.
Portfolio diversification is an advanced strategy that, in turbulent times, can prevent a portfolio from sinking. Part of the reason the average investor doesn’t consider it is that it usually takes multiple platforms to take positions in so many different asset classes. This is why PrimeXBT is the key to demystifying portfolio diversification once and for all.
Diversify with more than just trading instruments
PrimeXBT offers even more diversity beyond just trading instruments. The platform is the exclusive home of the Covesting copy trading module and Covet performance accounts. There is also a Contests area with weekly competitions and crypto rewards, as well as the PrimeXBT Trading Academy educational website.
Covesting copy trading offers traders another way to diversify their portfolios by putting capital behind top strategy managers with proven performance. Subscribers can copy trades from all Strategy Managers ranked by ROI on the Covesting Global Leaderboards, earning money when a trade is successful.
Followers can follow multiple strategy managers to build a diversified portfolio of strategies. Using the ranking filters, users can search for safer or more profitable strategies. The right mix of strategies can create a synergistic effect, just like the right mix of trading instruments can make a portfolio more profitable.
Best of all, PrimeXBT users can manage these positions and their portfolios from anywhere in the world at their fingertips using the completely free PrimeXBT smartphone app. The app is available as a free download for Android and iOS devices and recently received a new update to bring more platform features to the app experience.
Demystifying portfolio diversification with PrimeXBT
PrimeXBT has it all. It is the variety and range of trading instruments, tools, products and services that makes the platform the best when it comes to diversifying a trading portfolio.
Between long, short or hedge positions in markets like gold, oil, Bitcoin or the S&P 500, traders can create the perfect portfolio for their needs with PrimeXBT. Demystify the wallet diversification today with PrimeXBT.