Rebalancing As An Accumulation Model

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28 Feb 2024

Creativity Is Key
When it comes to accumulation, I am always looking to incorporate new and alternative strategies into my game plan. Passive Income is my preferred strategy, as capital is generated void of effort and cost. The key to effective financial strategies is to find ways of effectively leveraging the opportunities within the market. More common ideas include trading, staking, and any other form of passive income.
A financial strategy aims to either generate yield, or make use of a financial instrument for an economic, or profitable result. I have always thought of a financial whizz as an artist. An artist knows how to blend and apply paint, to create something of incredible beauty. Similarly, a financial whizz knows how to utilize and leverage financial instruments and ideas, to create a profitable outcome.
As an artist must spend time developing his skill, so too must any individual who decides to take on the world of investing. New investors remind me of an individual without any artistic training. A flop on the canvas by an inexperienced, yet zealous “artist” can be likened to the portfolio carnage of an inexperienced investor. An artist’s growth in creativity ultimately leads to more magnificent creations. This principle is also at work within the life of an investor.
A Helping Hand
This is primarily why I am always looking to improve and incorporate additional ideas into my strategies. If I continue to seek creativity, growth, and development, I will improve my skills and abilities over time. As I mentioned in a recent article, I am choosing to utilize several altcoins as a means to an end. I am gaining exposure to these coins, only to later rebalance them into my primary holdings. I am doing this for two primary reasons:

Projects are in trending sectors
Market cap valuations are tiny

In other words, projects that are part of a trending narrative are going to perform well in the interim. Furthermore, if the market cap valuations are still insignificant, a greater upside is almost guaranteed. So, why am I using this strategy?
Well, my primary holdings are only likely to rally in the final stages of this bull market. Instead of investing directly in these holdings, I am choosing to leverage the multiplication dynamic that is currently at work within the micro-cap and broader altcoin market. For example, look at Pangolin, a recent altcoin pick that has rallied 3400% in three months. These are the types of moves I want to leverage.
Utilizing a two-step process via an opportunity like Pangolin makes a lot more financial sense than investing directly into a project that is likely to only produce modest returns in the interim. Rebalancing profits after a trade like this can multiply my long-term holdings, as accumulation is now taking place at an accelerated pace. It also aids in avoiding the trap of forming an emotional attachment to an investment.

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Final Thoughts
Having a goal in sight will also encourage you to find ways of reaching it faster. In this particular instance, short-term investments are sacrificed over time for long-term investments. It’s a process of harvesting after a significant move. Modest amounts, are over time, rebalanced into my long-term holdings. In this way, I can build these holdings and realize Alpha at the same time. That’s it for this one. See you next time!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.