Besides individual risk-return preferences, each of us is at a different stage of building our capital. This stage affects the portfolio as much as capital, age and goals.

There are three stages of working with one's capital:

  • Formation

  • Accumulation

  • Preservation

In each stage of capital management, the portfolio usually consists of three parts: Preservation, Balance, and Growth.(PBG)

The share of each part and the assets in each part of the PBG portfolio are different at each stage. The tools from the capital formation phase in the capital accumulation phase.

Capital Formation stage

In this stage, everything earned goes to expenses – there are no major savings.

Portfolio proportion: P: 20% B: 30% G: 50%

Objective: Small tests, a lot of tools and attempts, , dozens of losses and successes, single shots to the moon.

Why this objective:

  • Because it is NOT possible to multiply your capital without .

  • Because any losses are covered relatively quickly by time, which can be spent to make the same amount of money you lost.

of G (growth) part of portfolio structure at the capital formation stage: Airdrops, IDOs and launchpads, Meme coins.

Example of B (balance) part of the portfolio: BTC, ETH accumulation according to the DCA model.

Example of P (preservation) part of the portfolio: Stablecoin "deposits".

Capital Accumulation stage

At this stage, the tools need to change – because the size of the loss is now more difficult to cover by simply spending time earning money. This is the stage where one has savings that will allow them to live without an income with their current lifestyle for 6+ months.

Portfolio proportion: P: 30% B: 40% G: 30%

Objective: avoid the gambling mechanics of the previous stage; track and rebalance your portfolio in 3 categories; choose investment tools you like and upscale them; hire operational people and tools to work on your portfolio (accounting, analytics, transactions, etc.).

Why this objective:

  • The size of the loss is now more difficult to compensate for with just time and earnings. One big loss can set you back for many years!

  • The team – because otherwise, you can't delay autonomous processes without personal involvement.

Example of G part of portfolio structure at the capital accumulation stage: venture capital deals, special opportunities.

Example of B part of the portfolio: BTC, ETH accumulation on the DCA model, liquid staking, market-neutral strategies.

Example of P part of the portfolio: stablecoin "deposits", leveraged "deposits".

Capital Preservation stage

At this stage, portfolio income supports family/children's lifestyle.

Objective: formed family office with managers, management principles, accounting and regular rebalancing of the portfolio.

Why this objective:

  • At this stage, there is a longer planning horizon influenced by macroeconomic cycles.

  • Managers are needed, because the portfolio can't be properly sustained without diversification of channels, diversification requires profound immersion in each channel, which requires time and expertise.

So before you start, map out an investment strategy and long-term plan, learn the tools, and try to ignore the noise.

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