Investing in PAMM accounts is becoming increasingly popular. However, choosing the right PAMM platform for investment is only half the battle. The higher the potential profit, the greater the risks, so it is crucial to diversify your risks by spreading your capital among selected PAMM accounts.
Don’t Chase Excessive Returns
Some investors approach investing rather carelessly, eager to maximize their monthly profits, often taking unjustified risks and forgetting the main rule of PAMM investing: it’s good to achieve a small profit, and even better to earn a large amount.
Building a Proper PAMM Portfolio
Regarding PAMM investing, some investors believe their overall return is zero. However, it’s important to understand that this depends primarily on the components of the investment portfolio, and a zero return is just the first step toward a positive result.
Of course, there are managers who show much higher returns. However, in almost all cases, this is associated with aggressive trading tactics. If your portfolio contains a large number of such aggressive accounts, the risk of losing funds increases significantly.
When selecting PAMM accounts, conduct a thorough analysis, distributing them not only by average profitability but also by risk level. After choosing PAMM accounts, allocate shares of your capital among them. The classic approach is to have about nine accounts in your PAMM portfolio, with 10% being aggressive and 90% conservative.
Conclusion
Including aggressive PAMM accounts in your investment portfolio is not mandatory. If your monthly profit is satisfactory, you can do without them, avoiding unnecessary risk of losing part of your funds.
