You are advicing him to add more altcoins to his portfolio, but his budget is no more than $400 if you count all of the altcoins he has.. So how are you gonna diversify all those altcoins you said? If you mean, 45% of bitcoin then it is $180 of btc, then you have 55% to diversify into those 10 altcoins you said, and the other 10 that he has.
How the f*ck is he gonna diversify $220 into 20 altcoins? $10 each one?
You raise a fair point. Small positions dilute portfolio returns, but the converse also can be argued. More positions means you have greater opportunity to allocate to a big winner that goes up 100x to 1000x. Even $10 invested in an Antshares, Verge, Dash type name will lead to a violent capital gain. By having skin in the game you have the crypto name on your radar and can swiftly allocate when the price declines and build up your position.
Portfolios are not static. The original investor that started this topic may get a raise at work, may work over time, may receive an inheritance or redeploy savings that are invested elsewhere because the $400 is a pilot run. They may have $400 today and $2000 tomorrow. Have some faith in humanity!
Diversification has worked well for me to stabilize portfolio returns when prices inevitably go down. There are lots of low market cap coins priced around 1 cent of less, the $10 can be meaningful as a starter not to mention the psychological boost when one of them starts to explode.
eduardorco best of luck to you!