93. Why Making These Mistakes Are Killing Your Portfolio

Number one mistake that's killing your portfolio is you have too many altcoins. We've all been there. We get excited, we get fomo, we chase it. Someone's bought something, someone's made a bunch of money. You hear an influencer talking about altcoins, you don't need to get in, you buy it. All of a sudden after 12, 24 months, you've woken up and you've got 35 altcoins in your portfolio and 34 of them, you don't even know what they do.

At the time, ETH was between 50 to 100 bucks. You chuck 500 to 1,000 in each ICO and that ETH went from 50 to $100 to 4,000, which is just incredible. And then I looked at my portfolio and I had 30, 40 altcoins. Then I put that collect your shift portfolio tool, the actual tool that I designed and created and the result came back and I just went till it was staring me in the face. That is when I got the hard truth of. Hey Bergs, you need to sort this out because your portfolio is. You need to get good.

Welcome back to another episode of the Ben and Bergs Podcast. I'm Ben, your favorite high school dropout and founder of Collective Shift. Alongside me is Bergs, your favorite MBA and CEO of Collective Shift, Australia's leading crypto portfolio insights company, providing professional analysis and portfolio strategies for crypto investors like you. We are a unique blend of the established and the self made. And we're here to break down crypto business and personal growth. But we don't just talk shit, we give you the insights you need to make better investments, build successful businesses and level up your life. And today we're talking about why these mistakes are killing your portfolio. And I guarantee you're making at least one of them because I was making all seven six years ago. How are you?

I'm really well, mate. Just looking at the list, I've made a fair few. How are you going today? You got all right?

Good man.

Good.

I'm good. We made this list up because so many people fall in this trap and we, we thought it's very important to share these with you because if you are making these mistakes, it's a very common thing. And it's also important to know that there is an alternative because we've all been there and most people fall into these trap because they follow people online who are teaching them to do these things right or you just naturally, you know, fall into one of these things because of the information you're getting. So number one mistake that's killing your portfolio is you have too many altcoins. Now, we've all been. We've all been there. We get excited, we get fomo, we chase it. Someone's bought something, someone's made a bunch of money. You hear an influencer talking about altcoins, you don't need to get in, you buy it. All of a sudden, after 12, 24 months, you've woken up and you've got 35 altcoins in your portfolio and 34 of them, you don't even know what they do. And for most of them, probably underperforming. And it's really important that you know what's in your portfolio because you need to understand what the token is trying to do and are they on track to accomplish or achieve what they're trying to build, because if they're not, the price is going to be heavily affected because there's a lot smarter people out there that probably understand what that token is or isn't doing and pushing the price either way. So by having too many old coins, one, you don't know what's going on within your portfolio. So if something changes, it's going to be too late to act. And number two, you don't have enough conviction in the assets that you do think are good, which means you don't have enough capital in the ones that aren't. So which means you don't have enough capital in the ones that are doing good, which means that even the ones you do win, you're not making enough of return because you've got so many poor performing ones, your total portfolio is performing poorly. So it's so common that you have too many old coins in your portfolio. So I'd urge you to have a look, restrategize, figure out the ones that aren't good. If you need help, you have click to shift and have a look at some of the research we're doing. But more importantly, review what you've got. If you've got too many.

Absolutely. I learned this the hard way, and I think in our Confessions episode, our Crypto mistakes episode, it would have been over a million dollars that I would have had if I just kept those old coins in eighth. At the time, eighth was between 50 to 100 bucks. You chuck 500 to $1,000 in each ICO and those that eighth went from 50 to $100 to 4,000.

Which is just incredible, right? And you think about that, that amount of money, and then I looked at my portfolio and I had 3, 30, 40 altcoins and I don't know how to keep on top of them. I'm not in their discords. I don't know what they're delivering. I can't remember what they promised the amount of sheer time I would have to put into it. Then I put that into the collectorship portfolio tool, the actual tool that I designed and created and the result came back and I just went, shit. I am very under allocated in Bitcoin, Ethereum and look at the different categories I'm allocated in. And I literally built this tool knowing all of this until it was staring me in the face. That is when I got the hard truth of hey, Burgs, you need to sort this out because your portfolio is shit. You need to get good and do the things that you're actually teaching other people to do.

Yeah, that tool man, that's an eye opener, right?

It just lays it out in front of you. It's like, this is what you've got within one second of putting in, it tells you and you're like, oh shit, okay, we need to do something here.

This ties into number two, which is FOMO buying. So fear of missing out. This is a big mistake a lot of people make when they hear a friend buying something or in a bull market, they start chasing something because they don't own it. Again, it's very difficult not to do it, but important to stay calm, stay patient, stay balanced, or relax. A lot of people get caught up in FOMO and the NFT boom where people went chasing because so many people were making so much money. And a year on, most NFTs are down 95 to 99%. Right. So crypto is, you know, very much driven on sentiment and hype and narratives. And when it's going good, it's good, but when it's bad, it's bad because there's not a lot of fundamentals backing a lot of the tokens. So just, just be aware of that. And be aware if you're, if you're chasing coins, that tends to end pretty poorly unless you're selling. So just be aware FOMO buying is can. Can kill your portfolio too.

You actually gave me a bit of fomo, Ben. So recently you've had a reallocation and you've bought some new coins. You told me about the research behind it. I looked at it on the collective shift platform and I started to get fomo. I know that if I move my allocation and I move into those coins, I have a higher chance of higher Returns and that's great. If my goal is to make more money, I'm like, oh, I've got it in bitcoin, I need to move, I need to do this. But I thought back and just my psychology and what I've learned about myself, one thing I do really well is I've just got diamond hands. And I'm like, do I want the burden of looking after those coins, seeing where they are, setting targets, executing, worrying about tax and what is the return? No. All of that to me where I'm at right now sounds painful. I don't want to do it. I would rather just dollar cost average have my money in there and then have one or two things to the side that I don't have to worry about. And when I came to that conclusion and the FOMO left me a couple of days later, I was like, this is the right decision for me. And where I'm at right now, that might change in the future. I may want to be more active, but for right now I want to be very low time and I want a decent return from it.

Yeah, that's important that you had that self awareness and those goals laid out. Back to another episode we did on how to create a strategy. If you don't have the strategy, it can be very difficult to be self aware and not fall into the emotion trap. The next one is listening to bad advice. And you know, we speak with a lot of people that have followed people online thinking they're trustworthy and thinking that they do good content and maybe they do good do good content. But a lot of people online are also paid to promote tokens. A lot of the people online have their own projects, they do advertising. A lot of it isn't aligned with the same incentives that you have as a user. And one of the biggest things that happened last year was obviously there was a lot of exchange meltdowns. And the cost of listening to poor advice would have been, or not getting the right advice would be that a lot of people lost a lot of money in those exchanges. You know, our head of research, Matt, last year put out an alert to our members a week before FTX went under to get your money off to ftx. And it saved a lot of our members a lot of money. Or when UST went to 92 cents, we put our alert to get money out of UST. Or when USDC started to debunk a de peg, we actually did the opposite. Most people were saying this is going to zero. We did the opposite. We came out and said that, no, stay calm, stay steady, it's okay. This is not a black swan event. But if you're listening to the wrong advice or wrong people online that are there to fear, create fear and you know, create clickbait and like create spark emotion, which is the opposite of what you should be doing. You should be sparking emotion, you should be sparking logic. You can fall in the wrong trap. So finding the right people to listen to, and I'm always going to take collective shift because it's the only people I listen to in my own investing. For our own analysts, I fundamentally believe that it's super important getting it from the right, right source.

Exactly. And even our analysts disagree on stuff and we'll give you those different opinions and we even got analysts outside of our company that come in and give us their opinion so you can have a more well rounded opinion that is your own and you're right. Isn't it wild, Ben, that when you see something on YouTube or Insta or wherever you see it, if someone's like breeding fear, it's like they're looking out for you and they're trying to teach you something and they've immediately got your attention. Whereas if it's about positivity and things will be all right, they're like, nah, nah, nah, you're trying to sell me something and you need to, you need to be aware of that. And also be aware if someone's talking about a token over and over again, why are they doing it? What are their incentives? Do they hold any, is there a token unlock for them? Are they, are you going to be the person they dump their tokens on? You need to really look at the incentives of why a person would do a certain thing. And, and if you're unsure, ask them and do your own research into what the allocations are. And a lot of the time token allocations will be for marketing or for influencers or for teams. And you'll see that within their white paper or coin market cap. So make sure you do your research and you understand.

Brilliant. Agree. Next one. Trading too much. This is a mistake people try. And we see a lot of people making the mistake of trying to trade, especially in bear markets, trying to make, you know, extra capital in the market's boring and quiet, getting too impatient. And yes, you can make money trading, but there's very few people that are good enough to do that. I think it's the numbers like less than 10% of people that actually trade, make money. So if you're trying to trade, you Know, make sure you're only doing on small capital sums, splitting out your portfolio. Don't start to invest your long term portfolio because it's going to kill your portfolio. In a bull market, especially if you're not set up and you're not experienced enough, you can lose a lot of money trading and you can also not make enough money trading. So in a bull market, what we see is actually most people that buy and hold tend to make more money than those people that try and trade. Because trading, you're getting in and out of markets where, you know, by holding good assets you can actually make multiple, you know, double digit, triple digit returns on your investments. When trading is very, you know, even more emotional, even more volatile. It can be very difficult to, to control. So just another mistake that we see a lot of people make trying to trade too early.

And a lot of traders only post their wins, not their loss. Even just this morning I saw in a trading, sorry, in a crypto group, the normal post in that crypto group has two comments. A trader posted with his wins and it had close to 200 comments. And what this person posted was, I started off with $500 18 months ago. I've traded this off to the side. This isn't my main, my main account. I now have $100,000. And what people see is going from 500 to $100,000. God knows if it's true or not, but people like, hey, I want to do that. But you have to understand what Ben said about being in that top 10% just to make a dollar, let alone being in the 1% and being profitable and having it as a full time job, what it actually takes, what that journey's like to manage your psychology, to have the tooling to understand the environment. You have to be full time for a very long time to get to that level. And I've learned this the hard way. I started off, I'm like, well, crypto is trading. I'll do some technical analysis, I'll get in, I'll have a margin account, I'll have everything. And what happens? You get wrecked. You don't understand. You have to sit in front of the screen for hours a day. You don't get to see your family or your mates. You have to turn your emotions off, which then affects the rest of your life. And you need to decide whether you want that life or not. Trading too much. Absolutely no. Spending maybe a couple of hours and learning a bit about charts for an entry for holding coins and investing. Absolutely.

Yeah, yeah, spot on. You get sucked into the dream of trading. I think I've seen it so many times, so many people. There's a lot of slimy people out there that will sell you, you know, stuff to hopes and dreams and just.

Look at the facts. Is published research on how many people actually make money and just think to yourself what do I have to be to get that 10%? And it is a lot of effort. It's a full time job. It's literally like doing a uni degree. Like would you do a degree just to be a profitable trader in three years? And you want to do that for your life. Give up all that time? Probably not.

And if it was that easy to turn $500 into a hundred thousand, everyone would be doing it.

That's right. Everyone would be rich. And these people wouldn't be selling courses. Exactly.

Next one. Chasing high yields. A lot of people like the idea of earning return on their crypto assets. But for most tokens the token economics aren't great. Like we just spoke about in a previous episode around the supply of new tokens. So just be wary when you're, when you're staking your crypto and earning a yield. Look at the token economics for. Because there are a lot of tokens that offer those staking rewards are actually printing new tokens every day which is not necessarily pushing pressure up on the price. It's giving you more tokens but the price is being pushed down because of the new supply. So just be aware of that if you're chasing, you know, staking returns. Be aware of the token economics and anything super high risk like you know, anything that's above 8% I'd be looking into. Especially if you're looking into like defi farming and like you know, all the sorts of different high risk, higher advanced strategies. Just be aware that the deeper you go into that space the more risk there is. And you know, just because something offers a percentage return doesn't mean it's actually going to play out. And ask if something is too good to be true. Usually is.

Exactly. And ask yourself how these guys are promising me 10%, 20%. How where's the money coming from? With a bank. Other people put their money in there, they lend it out. There's know, fractional reserve, all that kind of stuff. You understand the, how you get it. It's regulated, right? You got defi. I'm putting my money in there and you're giving me a return. How are you doing? Some kind of loan thing. Is that legal? What are the implications here? Do I have to then lock up my tokens in a smart contract for a certain period of time. How long does it take to get that out? What is the contract risk? What is the risk they will steal my money? Am I like, if I put eth in there, like that's perfectly good off to the side and I'm risking it for 5 to 6% to lose my entire stack? No, thank you. Yeah, you need to ask yourself, like, how am I being paid and what is the risk to me?

This is what a lot of people fell in the trap of the Luna thing when Luna was, you know, offering 20%, no, you know, no risk returns on the USD stablecoin. How.

Yeah, where are you, where are you getting that extra cash from? Like, please explain.

Yeah, next one is not exposed to the right sectors. So again, this comes back to the dashboard that we're talking about on the collective platform where you can and understanding of where you're exposed to not only getting exposed to the right sectors, but being overexposed or underexposed can be a big, A big thing. So you might end up owning only Ethereum tokens and Layer two solutions and tokens built on Ethereum. And now you're very, very much exposed to the Ethereum network. So understanding that is really important to help you diversify. And then also, you know, looking at sectors that we like, you know, like liquid staking and scaling and gaming, like, are you, Are you exposed to the right sectors leading to the bull market? Because if you can get on the right sectors and the narratives are right, you know, you're going to be. Your portfolio's going to be looking really good.

And this is really important because we tell people, you know, you buy a Bitcoin and Ethereum, that's great. And once you've reached that point and you're comfortable and you understand a bit more about crypto and how hardware wallets work and how exchanges work, now it's time to branch out and you need to decide what are the areas I understand and I want to invest in. Is it like you're saying, Ben? Is it gaming? Is it infrastructure? Is it defi, Is it layer one? Is it layer two? Look at those categories you can jump on the platform and we've got them listed there with our analysis against them, and you can get exposure to those specific sectors before the bull run hits, which is a great way to structure.

Yep, yep, spot on. Last but not least is don't have a strategy. So this is a really important one. If you haven't listened to the episode yet. Go and listen to episode 84, how to create a Winning Crypto Investing Strategy. This is a really important one and it's probably the biggest thing that will kill your portfolio because you won't have the ability to make money. You don't know what you're doing in terms of what your goals are, what your risk appetite, what you sell strategy is, at what time we sell, how you sell all these sorts of things. You need to get knuckled down. And we've been working with a lot of our clients at Collectorship for a long time now in creating, you know, a process that we've created to help you create a strategy. And we do that with all of our new members. But if you want to do it on your own, you can go and listen to that podcast, episode number 84, how to create a Winning Crypto Investing Strategy. That'll walk you through step by step on how to go out and actually create this strategy that we've put together a list of questions that we've come up with over the past three years to help you with your own PDF document that you walk away with, to walk into the next bull market and win with.

And it's so important it goes from go to woe. It's not just think about these things and buy them, it's where are you buying them, what are your sell targets? How are you going to layer out? When you layer out, what are you layering out into? Is it fair? Where are you going to store it? And then obviously, what's your goal? What are you going to do with the money? So a lot of thought has gone into this. It doesn't take very long to do this and once you've done it, you're like, wow. And it brings you such clarity.

Yeah, I totally agree. So there they are, folks, why making these mistakes are killing your portfolio. Quick recap. Too many old coins, FOMO buying, listening to bad advice, trading too much, chasing high yields, not exposed the right sectors, and not having a strategy. They're the top things we think that you need to try and fix. Hopefully, you know, you've learned a few things there. Let us know if you resonated with any of these. I certainly have done in the past. I think Bergs has too. Yeah. And, and maybe have some friends that resonate here. Maybe some friends, family, you know, maybe some people in crypto that, you know, that you think will find value in these. We'd love for you to share this episode with them. You can send a link WhatsApp it to them, message it to them, tweet at them, whatever it might be. We'd love for you to share with these episodes as it is the way we grow the podcast and get the message out there to help people invest in crypto the right way.

Absolutely mate. You've nailed it. And if you've got crypto mates, send this to them. Everyone needs a reminder all of the time. You need to check in, you need to make sure you're not making these mistakes and correct them before it is too late.

Yeah, bang on man. Great. Thank you everyone as always. You can follow us on Twitter at Babyback Berg and at Ben Simpsonau and we've got a podcast Twitter at Ben and Bergs. You can search up with some nice little reels and little clips coming out burgs. We've been, I mean you've been putting.

Those together upping the game mate but it's looking like.

Thanks everyone for listening. We'll see you next episode.