Following the recent movements of Bitcoin and other cryptocurrencies, we would like to give you some brief insights into the risk allocation management of our high-level investment portfolio. Therefore we strongly recommend not to wander off into unknown waters, for instance, investing without any basic knowledge in cryptocurrencies like Bitcoin or Ripple (XRP), as this could lead to a substantial loss due to the extreme volatility of those currencies.
There is no need to panic, though; we can assure you that all your outstanding orders are safe and will be executed according to their original conditions, given they fulfill the respective market conditions. Since currently there is no market on which these customers can trade, we locked them safely away in cold storage. We will release them only aftermarket stabilization at a value that will satisfy all customers and avoid any substantial loss.
There’s another worthwhile place to consider high-level risk trading for those who already venture out into other investment areas such as forex or commodities. The term ‘high-level risk’ generally refers to small volume trades which offer potentially significant returns if successful (and correspondingly large losses if unsuccessful).
The problem is From time to time, core investment holdings seek to diversify their diversify of high-level risk investments by investing in various other stocks, commodities, bonds, or real estate. This will usually reduce the overall risk level for investors as their portfolios are less strongly tied to the performance of one specific market segment. The following graph shows how core investments can reach relatively stable asset allocations, mostly around 50 percent, if they diversify their investments over different elements. However, it is essential to note that each core holding has its independent weighting within an investor’s portfolio and may thus deviate from this average value.
It should be noted that core liabilities also commonly diversify their high-level risk investments by spreading them across multiple financial assets classes.
This process is illustrated in the following graph to look at how core liabilities have been allocated over time to various risk investments rather than just focusing on their average allocation of around 50 percent to each category.
For specific uses, it may be helpful to look into more detailed information regarding the allocations specific individual financial assets or liabilities where potential deviation from the average value can represent significant differences in overall portfolio risk for investors. This might be important if an investor wants to compare his investment level against some benchmark index. If this is not required, it may simply be better not to look too closely at these deviations and focus more on tracking previous trends instead.
