Throughout this study, we will compare the performance of a simple buy and hold strategy to portfolio rebalancing.

Although portfolio rebalancing isn’t the strategy we are focusing on in this article, we have also found portfolio rebalancing can potentially boost performance based on our historical backtests.

Learn more in our previous study here.

The actual strategy we are targeting in this study is the simple strategy of adding more assets to your portfolio.

That’s right, we’ve historically found adding more assets to your portfolio boosts returns.

So, let’s prove it!

The Setup

In this study, we will test portfolios ranging in size from 2 to 40 cryptocurrencies. That means by the end we will have 100,000 backtests to find the trends in our data.

The results of those backtests will be broken down by strategy type.

We will also convert the graphs to a simple line graph that shows the relationship between the number of assets in a portfolio and the median value of the portfolio at the end of a one year period.

The initial investment for each backtest is set to $5,000.

You can read more about the setup from our previous study here.

HODL