Optimize Your Investments: The Definitive Guide to Dollar-Cost Averaging on Zignaly
Today, we aim to highlight select services available in our marketplace and demonstrate how you can optimize your returns. This real-life scenario involves a trader account with a sole investor. By implementing this strategy, any investor could have potentially gained an extra ~82% in profit.
Selected Services:
Return: 20.52%
The ‘Coin Selection Portfolio’ strategy operates within a defined universe of 25 coins, allowing for exposure to diverse market narratives. Its aim is to establish a fully automated and diversified portfolio.
This strategy incorporates an automated rebalancing mechanism governed by thresholds. As any coin within the portfolio surpasses its threshold, the system initiates a rebalance, ensuring an equalized allocation among the 25 coins involved. The assigned weights for each coin correspond to their market capitalization, strategically mitigating the adverse effects of volatility.
Investment universe:
BTC, ETH, BNB, XRP, DOGE, SOL, MATIC, SHIB, UNI, BCH, LINK, XMR, ATOM, HBAR, ARB, QNT, NEAR, THETA, RNDR, PEPE, SUI, WOO, RUNE, ENJ and AGIX.
The investment universe is subject to change based on i) the fundamentals, ii) If a narrative is exhausted, iii) A new coin appears that is a better fit for the portfolio, based on extensive research.
👉Try it out here.
Return: 21.92%
An investment strategy focusing on the Top Layer 1 and Layer 2 coins available on Binance. Comparable to the ‘Coin Selection Portfolio,’ this approach implements an automated rebalancing system reliant on predefined thresholds, recalibrating allocations as coins surpass these thresholds.
Investment universe:
ETH, BNB, ADA, SOL, MATIC, DOT, AVAX, ARB, OP, and LRC
The investment universe may shift according to the Market Capitalization and volume metrics of the mentioned assets. While Market Capitalization takes precedence, the coin’s significance is evaluated based on the volumes generated on Binance. If volume thresholds are breached, the portfolio undergoes rebalancing to maintain continual liquidity.
👉Try it out here.
3. Top 10 ETH Ecosystem Portfolio
Return: 2.42%
Employing a comparable automated rebalancing approach, the ‘Top 10 ETH Ecosystem Portfolio’ operates within an investment scope comprising leading projects within the Ethereum Ecosystem. This selection is determined by market capitalization and liquidity dynamics. Like the previously outlined strategies, the coin’s importance is assessed using Binance trading volumes. Should these volumes challenge set thresholds, the portfolio undergoes rebalancing to ensure ongoing liquidity.
Investment universe:
ETH, SHIB, UNI, ARB, SAND, RNDR, ENJ, MASK, LRC, and WLD
👉Try it out here.
Return: 39.29%
The ‘Top 10 AI Portfolio’ implements an automated rebalancing strategy within the thriving WEB3 AI sector! With AI projects spearheading the digital assets sphere, having a tracker that consistently exposes investors to the finest Crypto AI projects is crucial. Similar to the previously mentioned approaches, the asset’s allocation in the portfolio is determined by Binance trading volumes. Should these volumes challenge established thresholds, the portfolio undergoes rebalancing to maintain uninterrupted liquidity.
Investment universe:
GRT, INJ, RNDR, AGIX, ROSE, FET, OCEAN, RLC, NMR, and PHB
👉Try it out here.
Having established an understanding of the above-mentioned investment strategies, let’s swiftly assess the impact of Dollar-Cost Averaging on investor returns.
One-time Investment Return
Assuming an investor allocates a one-time investment of $7,500 between all four of the services, here is what the results will look like:
Coin Selection Portfolio:
Investment = $3,000
% Return = 20.52%
Dollar Return = $615.
Top 10 L1-L2 Portfolio:
Investment = $1,500
% Return = 21.92%
Dollar Return = $328.8
Top 10 ETH Ecosystem Portfolio:
Investment = $1,500
% Return = 2.42%
Dollar Return = $36.3
Top 10 AI Portfolio:
Investment = $1,500
% Return = 39.29%
Dollar Return = $589.35
The one-time investment strategy yields the investor a jaw-dropping profit of $1,570.05, or 20.93%, in 3 months. But wait, it gets better. Continue reading to learn how.
Enter the DCA Strategy…
Now, let’s consider another investor who preferred to break down their investments into intervals rather than using the one-time investment strategy. Here goes:
Coin Selection Portfolio:
Investment = $3,000
% Return = 35.65%
Dollar Return = $1069.56
Top 10 L1-L2 Portfolio:
Investment = $1,500
% Return = 39.13%
Dollar Return = $587.63
Top 10 ETH Ecosystem Portfolio:
Investment = $1,500
% Return = 22.73%
Dollar Return = $340.96
Top 10 AI Portfolio:
Investment = $1,500
% Return = 57.96%
Dollar Return = $869.47
Astounding profits totaling $2,867.62 (38.23%) over 3 months have materialized using identical portfolios, with the only differentiator being the application of Dollar Cost Averaging. Here’s a glimpse of the trader’s actual portfolio where we achieved this:
Conclusion
The recent three months have proven to be an opportune window for implementing the Dollar-Cost-Averaging (DCA) strategy. Despite an uptrend not being the most advantageous moment for its deployment, the DCA strategy shines as an exceptional means to minimize risk exposure and hasten recovery from potential losses.
Within Zignaly’s platform, investors can leverage strategic investment during market dips, capitalizing on these opportunities to amplify their returns during market recoveries.
While a passive income setup remains a coveted scenario, today’s evidence and empirical data substantiate the efficacy of an active investment approach. Utilizing a seemingly simple yet potent strategy like DCA, investors can substantially boost their returns by adeptly navigating market downturns.