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?
Definitely using paper wallets is a good idea. Be sure to store the private keys safely. I think hacking a hard copy of the private keys in a safe deposit box is a good idea.
I dont think there is really any need to split the Bitcoins among several addresses unless you are worried about someone trying to steal the private key if it has a huge number of Bitcoins on it, or if you are worried about people tracking how much you are cashing out.