Well, I think that you can do both.
You’ve mentioned about diversifying your portfolio and I believe that you should put most of your investments into a safe and popular cryptocurrency whether that is bitcoin or ethereum and then you should also invest some of your money into new and upcoming projects.
Taking risks sometimes is not a bad thing
You are right but that is only good for people who can manage both in a good way. You will often find people making both investments and getting into trading but failing miserably in one of the two. I know it's not that difficult to make investments if you are to choose only the top cryptocurrencies such as Bitcoin, but when it comes to trading, people often lose more money in trading than they can recover from their investments.
So someone willing to get their fingers into both investments and trading needs to make sure that they understand how both work because you can't expect trading to be just like investments where you buy an asset, keep it for some time, and then sell it when you are getting some profit. In trading, things get a bit fast, and only those who can keep up with that face succeed in it.