Kevin O’Leary’s S&P 500 Portfolio Investment Rules

Shark Tank star and billionaire investor Kevin O’Leary is sharing his latest crypto investment strategy in the wake of volatility affecting most asset classes.

In a new interview with the Bankless podcast, O’Leary explains how he abides by the general rules of portfolio theory when allocating capital for cryptocurrency investments.

“I’ve been layering in now for 36 months. I started at 2.5%, went to 7%, then we went past 15%.

In portfolio theory, if you’re running a mandate such as a sovereign fund, let me give you the rules by which those big boys play. I’m using the same philosophy for crypto.

We have 11 sectors in the S&P 500. Portfolio theory would tell you, never more than 20% in any one sector, never more than 5% in any one stock or bond. That’s diversification and that’s basically how 99% of sovereign wealth is managed by indexers like me and many others are like me.

I’ve done the same thing in crypto.”

Kevin O’Leary’s Crypto Portfolio Investment Rules

The venture capitalist next lays out how he structures his crypto investments on a percentage basis, before sharing specific holdings such as Bitcoin (BTC), Ethereum (ETH), US Dollar Coin (USDC), layer-2 scaling solution Polygon (MATIC), and layer-1 blockchain protocol Solana (SOL).

“I think crypto will be the 12th sector of the economy in 10 years, I’m going to treat it that way now in the operating company. That means I can put up to 20% of our operating capital into the crypto space. Then I want diversification, so I’ve basically done exactly that.

My largest holdings right now are Ethereum and Bitcoin, that’s not a big surprise. But I also have a big position in USDC, big position in FTX as an equity, which is a private company.

And then on down, Polygon. I got involved with Sandeep [Nailwal], I liked his story… Trying to reduce gas fees on top of Ethereum makes a lot of sense for India and other countries like that.

I love what’s going on in all in the Serum projects. Solana, I’m a big fan of what Sam Bankman-Fried is doing.”

O’Leary stresses the importance of holding diversified assets within an investment portfolio to help weather the storms when markets are unstable.

“These things all make sense to me in the proportions of diversification. That portfolio, I’d say about eight weeks ago was at 21%, now it’s down at about 18%. There’s been a big correction in the market, but you’ve got to hold your nose and get used to the volatility.”

O’Leary’s Looking for Stablecoin Regulations

When it comes to stablecoins, crypto assets that aim to peg their value to currencies like the US dollar, the Shark Tank investor says he’s eager for the government to provide regulatory clarity once and for all.

“I’m trying to get some policy while I’m here in Washington. Give me one thing, just give me policy on stablecoins and let the market compete.

I could put a lot more into that space because I’ve got a lot of cash on my operating company balance sheets and I have nowhere to put it. Inflation is 6%, 7%, 8%, and I’m getting 45 basis points in a bank.

That’s really crazy. I could do a lot more with stablecoins.”

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