Fumbi news
2. June 2022  • clock 3 min •  Daniel Mitrovsky

Fumbi Index Portfolio Quarterly Update – June 2022

A team of experts at Fumbi is constantly analysing current developments in the cryptocurrency market and working hard to bring you only the best. That is why, after another three months, we have updated the assets in our flagship product Fumbi Index Portfolio. We have added new assets with high technological and growth potential and removed those that no longer meet our criteria, and their activity has been lower in recent months.

Diversification of the Investment Portfolio Is the Key to Success

In the investment practice, diversification is considered the most optimal solution for reducing investment risk. Diversification is a method by which an investor distributes his capital among several assets as individual assets react differently to changes in market conditions.

In the case of volatile markets, including the cryptocurrency market, diversification is essential. Investing in only one cryptocurrency can generate 100% of profits but also 100% of losses. However, if you invest in a comprehensive portfolio, the risk of failure and loss of your funds is significantly lower.

Furthermore, an actively managed and diversified investment portfolio that mimics market developments provides investors with the opportunity to generate higher returns on multiple assets, as opposed to investing in a single asset, where the risk of loss is much higher.

At Fumbi, we provide you with the option of regular monthly investments in a dynamic, rebalanced investment portfolio through our Fumbi Index Portfolio product with a deposit of as little as €50.

Which Cryptocurrencies Did We Add to Our Portfolio? 

We carefully analyse the cryptocurrency market’s current situation for you daily to add new assets with high growth and innovation potential. During the June update, we added the following assets to our portfolio:

  • Maker (MKR) – Maker is a pioneer and currently the leading platform in decentralised finance (DeFi). Its decentralised autonomous organisations control Dai’s stablecoin and manage its risk parameters.

Which Cryptocurrencies Did We Remove From Our Portfolio?

The portfolio update also includes the elimination of cryptoassets that no longer meet our strict selection criteria. We have also decided to eliminate some cryptoassets due to low activity or market return in recent months.

The removed cryptocurrencies are:

  • Fantom (FTM)
  • Monero (XMR)

A few weeks ago, we also delisted the cryptocurrency Terra (LUNA) from our Fumbi Index Portfolio, which fell victim to a coordinated attack, and its price fell by more than 99%. Fumbi responded to this situation immediately by removing this asset from our product portfolio. If you’ve missed the situation with Luna and the stablecoin TerraUSD, you can read more about it in our blog post.

Four Important Tips to Help You Manage Your Investments Effectively

  • Set your investment goal – Keep in mind that investing in cryptocurrencies is not a way to make a quick fortune. It is important to perceive investing in cryptocurrencies instead as a long-distance run. Therefore, it is essential to set your own investment goals, which you will firmly follow. For example, when investing in cryptocurrencies, it is a good idea to plan an entry (buying) point and an exit point (the point at which you will sell assets) and stick to these points. Investing with a predetermined goal can help you manage price fluctuations in the market more easily.
  • Emotions aside – The lack of knowledge and investment experience causes many investors to sell their investment portfolios in panic under the influence of emotions, even when their investment is down. Don’t let emotions influence your investment decisions. Being a successful investor does not mean getting rich in a day but building wealth based on rational and systematic investment. You can read more about how to respond to market movements in this article.
  • Avoid the FOMO effect – FOMO is an effect caused by the fear of missing out on a once-in-a-lifetime investment opportunity. Investing under the influence of the FOMO effect can force you to buy cryptocurrencies that you would normally ignore. The same is true of the sharp rise in cryptocurrencies, where the fear of missing out will cause you to buy cryptocurrency at its peak. Avoid the FOMO effect and instead invest regularly and long-term.
  • Long-term investing is the way – Investors should not enter the market just because of quick profits or short-term speculation. The ever-evolving cryptocurrency technology is still under development, but with increasing adoption, more and more investors from traditional financial markets can be expected to be interested in cryptocurrencies.

How Do We Select Cryptocurrencies?

At Fumbi, we follow strict rules for selecting cryptocurrencies that enter our portfolio. In addition to formal criteria related to liquidity, market capitalisation or custody, assets must have strong fundamentals in three categories, which we identify as key to the market: payment systems, decentralised finance, and Web 3.

You can read more about constructing our portfolio in this article.

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Daniel Mitrovsky


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