Suppose I hold lot of bitcoins in exchanges and in some wallet. To prevent the loss of bitcoins, how should one manage them?
Generate multiple new addresses. Distribute the bitcoins among these addresses. Copy the private keys of these addresses to paper wallet.
Is this the way to do it?
What are other better ways to manage large number of bitcoins?
Paper wallet, cold storage, hardware wallets should be some of your best bets. You could also store them in an offline wallet via a computer which you do (Regularly at least) use. Another simple option would be to store the wallet.dat file into several USBs, to prevent losing your .dat file by corrupt or lost devices. Online wallets are best to be avoided, especially if you do not have access to the private keys, if you are going to use one, opt for ones that support 2FA at least.