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Teroxx App – Web Version
Teroxx Pay Banking Services
August 18
4 min read

Most Common Mistakes in Rebalancing Crypto Portfolios

Rebalancing a crypto portfolio is key to managing risk and also optimizing your potential returns.

Failing to rebalance, or getting it wrong, can impact the success of your portfolio significantly. There are many common mistakes that can be made when trying to stay on top of a portfolio and not all of them are obvious, so we’ve compiled a selection of the most common to help you avoid the major pitfalls.

Read on to see the most frequent missteps made when rebalancing.

A woman working on a laptop by the sea at sunset with text overlay: "Common mistakes to avoid when rebalancing a crypto portfolio."
Slide with title "What to Watch in Your Portfolio" and subtitle "There are 8 major areas to be aware of when trying to maintain a balanced portfolio which carries a suitable level of exposure."
Coastal rock arch over the sea with text overlay: "Lack of Diversification – By not diversifying the assets in a portfolio, it leaves it open to risk if the main asset experiences a sudden decline due to market volatility."
Slide titled "Focusing on profit or loss only" with text explaining that the objective of rebalancing is to redistribute risk optimally across assets, and that chasing profits or correcting losses can cause issues.
Dark blue gradient background with text overlay: "Ignoring Risk Management – By not paying proper attention to risk management strategies such as stop-loss orders, an investor can inadvertently increase their exposure to market volatility."
Dark blue gradient background with text overlay: "Rebalancing too often or too infrequently – Finding the right balance when it comes to frequency is important… Not enough and your portfolio can become vulnerable."
Close-up of a person holding a compass in the mountains with text overlay: "Failing to heed expertise or analysis – Sometimes it’s hard to resist an emotional reaction… But it’s important to stick to predetermined strategies and long-term goals."
Dark blue background with text overlay: "Emotional Trading – Trying to rebalance a portfolio without the necessary knowledge or experience, or not taking on board detailed analysis… can lead to poor choices that negatively impact a portfolio."
Scenic view of a coastline at sunset with text overlay: "Neglecting to keep detailed records – By not diversifying the assets in a portfolio, it leaves it open to risk if the main asset experiences a sudden decline due to market volatility."
Scenic view of a coastline at sunset with text overlay: "Neglecting to keep detailed records – By not diversifying the assets in a portfolio, it leaves it open to risk if the main asset experiences a sudden decline due to market volatility."

 

The descriptions provided are all based on publicly available information. Sources of information used in this post include Investopedia, Forbes, the European Commission and Deloitte.
 All transactions involving digital assets involve certain risks, which you should familiarize yourself with prior to any investment.

 
TOPICS
Digital Assets

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