An investment strategy is an elaborate plan for investors who want to secure profits by investing their funds in financial instruments.
For those profits not to be driven by chance but to depend on a competently carried out forecast, you should attend an investment seminar to get detailed information about the importance of applying strategies. The plans are developed to assess chances to profit from using one or more assets.
Investment Strategies
There are many investment strategies. However, starting to invest is only possible by opening a special account with a brokerage company.
Ready-Made Solutions
There are plenty of ready-made strategies. New investment projects are constantly being developed, and reliable strategies are updated periodically to keep up with market changes. To stay informed about the latest innovations, experienced investors attend Investment seminars. Beginners should use a ready-made system. During work, learning to complement your preferred strategy with your personal ideas is recommended to reduce risks and boost profits.
Buy-and-Hold Strategy
A system for lazy investors. The idea is to buy financial tools selected per analysts’ recommendations or your own forecast. Next, the investor should wait for the asset value to grow. The disadvantage of the strategy is deep and prolonged drawdowns. Few investors can stay calm when seeing their increasing losses. Among the generally accepted advantages is the lack of necessity to keep monitoring the market situation, close a lot of deals within a short period, and frequently pay fees and taxes.
Dividend Strategy
The system implies that profits are derived not by selling assets at a more favorable price, but by receiving dividends. To successfully apply the strategy, the investor must keep track of the information published by issuers. Among its advantages are passive income and an easily buildable portfolio. All the investor needs to select securities is to obtain payment frequency and dividend amount data. The drawback of the strategy is that issuers are eligible to cancel payments at any time.
Stable Portfolio (60/40)
It is a classic method of securing high profits and protecting your portfolio from market downturns. The strategy implies dividing the investor’s funds into an active and an insurance component. The investor should invest 60% of the total portfolio value in stocks or other volatile tools, and 40% should be invested in bonds or similar low-risk assets. The opportunity to get high profits under reliable capital protection is an advantage. The strategy efficiency depends on the selected assets and the right capital balancing. Many see it as a drawback.
All Weather Portfolio
Behind the system is the idea of building a portfolio resistant to market changes. The author of the strategy is financier Ray Dalio. He suggested that investors purchase different proportions of stocks, bonds, precious metals, and commodities. The efficiency of the strategy application comes from a competent choice of both investment goals and the percentage share in the invested funds. For example, the author recommended investing 30% in shares of large American companies, 40% in long-term and 15% in medium-term government bonds, and equally dividing the rest between gold and commodities.
Money-Cost Averaging Strategy
The idea is to purchase shares at a set frequency or subject to quotation changes by a certain value. The strategy has proven to demonstrate decent results in a descending market. The investor keeps investing despite the growing loss. At some point, the trend will make a U-turn, and investments will begin to generate profits. The advantage of this strategy is the opportunity to hit the very bottom of the falling market and quickly compensate for the previous losses. The drawback is significant and long-term drawdowns.
Investors choose suitable strategies considering their financial standing, the available time and capability to monitor assets, goals set, and the ability to keep negative emotions in check and retain control during long gainless periods. We suggest that you carefully study the chosen strategy, test its workability in test mode, assess the results, and only after that use it for real transactions.
