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Why Is It Important To Diversify Your Investment Portfolio? Exclusive Interview With Bryce Gilleland

Brainz Magazine Exclusive Interview

 

Bryce Gilleland has an MBA from Berkeley, Haas and a BS in economics from UCI. He operates Asha Capital Partners and previously ran the No.1 performing fund in 2020, returning 846%, which grew from $8M to over $600M in under two years.


He also serves on the board of Global Glimpse, a non-profit supporting emerging leaders, and as an advisor on Berkeley’s Cal VC Innovation Fund, an early stage investment fund that partners with the school, sharing proceeds to help further education.

Photo by: Private

You are a high-energy business veteran, cryptocurrency expert, has fulfilled various roles in Fortune 500 companies as a senior manager in investor relations and corporate strategy, and CEO of Asha Capital Partners. How do you handle such a big responsibility?

It is through keeping your eye on the big picture. We provide a service and that means everything we do should be handled with careful consideration and effort.

Then, making sure I have a great team that knows this as well so I don’t have to micro-manage activities as we all know the first principle of the company. We check in on big things, make sure we align with our purpose, and move forward.

All of us handle large responsibilities in our day to day lives. Whether that is taking care of a family, running an organization, going to school, or all of the above. For any of these roles, those that stand out to me are individuals who were determined and predictive. In our day to day lives we all have the opportunity to positively or negatively impact others and working hard to do the right thing, I believe, is all a responsibility we all share.

"This gets down to respect, and being a good human."

For me, I like to treat others how I would want to be treated. My Mother always said the golden rule was “doing unto others as you would like others to do unto you.” I take this into account in any role I have and expect the same of my team. Is the next action I take something my family would be proud of? How could I do it better? What would a discerning customer want to see? Testing your actions and strategy against these questions helps get you, or your team, closest to a best possible outcome.

For my current role that means clear and honest communication, diligence and determination in my work, and the desire to do my best, and of course lead by example. Taking that a step further means getting ahead of the curve. In the world of finance, we try to predict what is coming next and position ourselves in a way that can take advantage of that potential opportunity. In some cases this means being defensive, in others being aggressive. The end goal is what will positively support our customers and their goals.

Managing other people’s money is a great responsibility and while what we provide is investment services, what we really provide is peace of mind. My goal is to ensure our customers know we are working hard to make their future as bright and stress free as possible.

How did you end up in the cryptocurrency industry?

My friends and I were always interested in investing. I was an Economics major and ever since I was a young kid finances interested me. I saw parents talking about them, and planning around them. I remember sitting around the kitchen table and hearing discussion, some good and some bad. My parents would hide little finance secrets with me and I wasn’t supposed to tell Dad about Mom’s credit cards, and I wasn’t supposed to tell Mom about Dad’s art collection. It was a stress I saw first hand on my family and something I’ve always sought to reduce for myself, and others.


Also, while finance appeared boring to others, it was exciting to me.


When I learned about cryptocurrency I saw a way of supercharging one’s portfolio. In my previous work I would give seminars on 401k investing and maximizing long-term retirement growth. In a good scenario one could expect 8-10% annualized gains. When I saw the opportunity of cryptocurrencies, and knew how quickly new technology could gain market share, it was clear to me that this was a way to supercharge a portfolio and more importantly, something I wanted to be in.


The technology of the sector, and the simplicity of having humans not control all of the levers with policies that over and over again caused huge economic downturns, exemplified this opportunity. It also was an area that was growing more and more over time. That is, more and more people were getting interested, and the space was growing at such a rapid pace in terms of new companies and offerings. If you couple these things, the massive growth opportunity is clear.


The thing to manage after the growth was the downside. Most newer spaces are more susceptible to large gains, but also susceptible to large losses. Cycles will always exist, this is simply human nature repeating itself. This meant be prudent: be focused on growth, and know when to turn that focus to protection. Protecting during a downturn means you have much more opportunity when the next uptrend comes along.


For me it was clear, you could see decades of gains in only a few short years in cryptocurrencies. In 2016 I hopped in and worked hard to become an expert.


Do you have any tips for people that have just started paying attention to cryptocurrency and are wondering whether to invest or not? Are there any specific things you need to know about or avoid in the beginning?

I recommend a focus on the long-term. While you can supercharge a portfolio, you also need to be very cautious. Most people who ask me about crypto ask “what’s the next big coin?” They see it as a get rich quick scheme and just want to find that one. While there are stories of that working, that’s rare and chasing that dream leads to disappointment over and over again.


My tip is to understand the cycles and the timing. Generally Bitcoin, and cryptocurrencies, go on cycles. They have incredible returns for 1-2 years, then they pull back significantly for a year, then they go sideways for a year. Emotionally this means people get very interested for one year - typically at the end of the cycle - and buy at a high price. They then see it crash a year or less later and are disappointed. That’s the opposite of what you want to do.


Most people invest in the space when the price is high and it’s all over the news - this is the number one mistake to avoid.


The real method for making it in the space is to wait until the crash finishes and you stop reading about it on the news. When the sector and space is most quiet that’s when the opportunity is the greatest. The price has declined and there is a sense of fear and “will it just go to zero?” That is when Buffett’s phrase comes in “when others are fearful, be greedy.”


It may take a year or two to see your money grow significantly, but the upside potential is great. This again focuses the investor on long-term investment gains, not get rich quick schemes.


It always makes me laugh that people are willing to put money into their 401k for 30+ years and just let it grow, but want crypto to make them rich tomorrow. If you even take the 30 year timeline down to three or four years, and set your expectations as such, you can find this space is an incredible opportunity.


The other method, which others are also disappointed to hear, is devoting your life to the space and working very hard to find promising projects early and then invest across a variety of those. The problem with this is you have to change your entire life around, and then you are working to find a limited number of spots against people who have been in the space for years.

Photo by: Private

You talk a lot about the importance of diversifying your investment portfolio, can you elaborate on this?

Yes, diversity of strategy, not just diversity of holdings. This is a concept I think nearly everyone could adopt more of.


Everyone hears a diversified portfolio is key. Most people, and most financial advisers, stick to the common 60/40 portfolio. That is where 60% of your portfolio is in stocks and 40% is in bonds. While this sounds safe, like 2022 has shown us, this can lead to your whole portfolio drawing down. We call that systemic risk - when assets are all systematically correlated.

What a diversified set of strategies can do is create opportunities during market downturns. Do you have a trend following aspect to your portfolio allowing you to short the market and ride trends downwards? These exist in almost all sectors and studies show that having a portion of your portfolio in trend following strategies, in the 20-30% range, can significantly increase portfolio performance over the long-run.

This makes sense. If markets go through cycles, it is only a matter of time before the market turns down again. Given that, make sure your portfolio is prepared for such activity - that’s an example of diversification of strategy.

There are many more complex opportunities like VC investments, arbitrage, foreign currency trading, etc. One can go down a rabbit hole, and my recommendation is find out about trend-following first and then continue to expand your alternative investments from there.

For thinking about digital currencies, it’s carving out a piece of your portfolio that can fit into digital currencies. If you are risk avoidant, put in 2-5% of your portfolio. If you’re risk inclined and more interested in upside, 5-10% may be reasonable. I, of course, have a much larger portion of my portfolio carved out for digital currencies. That means it either owns digital currencies, or, like now, is in cash waiting to purchase them when I feel the price has declined significantly and we are again at a great value buy - we are close.


Finally, what’s the next big goal or project in your career and how can someone get in contact with you?


For me the next big goal is to help educate others on the possibilities for their portfolios and continue to educate people on how to safely invest in digital currencies. Most investors that I know that have ‘control’ of their lives have taken their professions seriously. Peace of mind comes from having a trusted advisor who manages their assets.


There is a trust bond between both the investor and the advisor, that allows them to stay focused on their work without sacrificing returns.


I have realized that many people don’t take active control of their portfolios, or know what their advisors are doing. While I know everyone can’t be interested in finance, knowing enough to be comfortable is important. Think of it like your health - you want to know what you are putting in your body, and how to maintain it. You don’t have to be a nutritionist, personal trainer, or Doctor, but it’s good to know the basics.


I work to make sure all of my LPs, and everyone who wants to chat with me, can at least learn a little and have a growing level of comfort, without being overwhelmed by complex terms or market lingo.


This is what leads to peace of mind and peace of mind is what investing is for - knowing you have a secure future.


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