Sample asset allocation based on different risk profiles:
1. Conservative Risk
Investor Profile: Conservative investors take the least amount of risk and prefer stability. The primary goal is capital preservation; they need the money soon or might be close to achieving their goals. This means they don’t need the additional risk. These investors normally have a larger allocation toward interest-earning stablecoins.
2. Moderate Risk
Investor Profile: Balanced or moderate risk investors are comparatively more risk-tolerant when compared to conservative investors. They are willing to take on more risk for higher returns. Their portfolio is generally divided between safer positions like stablecoins and slightly greater exposure to top 10 cryptocurrencies like Bitcoin and Ethereum. They have some experience, looking for moderate growth, and diversification, and are willing to tolerate some market volatility.
3. Aggressive Risk
Investor Profile: These investors are huge risk takes who are looking to maximize the growth potential in their portfolio. They are highly knowledgeable and are comfortable seeing significant movements in their portfolios to get greater returns. They can also have exposure to a wide variety of coins and tokens.
Though this is generally perceived to be a smart approach, asset allocation and diversification do not guarantee profits or ensure against losses in a declining market. This information is intended for illustrative purposes only. This is not intended as investment advice. Investing involves risk, including possible loss of principal.