Selecting the Best Investment Strategies

Before deciding to venture into investment either for growth or income purposes, there is need to understand some of the underlying investment t strategies that can be applicable during your journey on investment. It is crucial to adopt one to two strategies or a combination of strategies depending on the nature and the objective of the investment. In regard, there are various investment strategies including some of the new emerging strategies that are being used by investor to realize their financial goals. Smart investors have used some of the strategies to manage risks. With the advancement in technology and the evolution of the market trends it is vital to make changes or come up with innovative investment strategies to be able to address the present market conditions. Strategies are independent and unique hence if it works for one investor, it may not work for another investor. This largely depends on how you implement the strategy and execute it to the latter. Improper implementation may not yield to desired outcomes.

 

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Fundamental Investment Strategies

There are numerous fundamental strategies that may be suitable for your investment namely; value investing, income investing, growth investing, qualitative measures, buy & hold, and technical analysis. The buy & hold strategy upholds time in the market as it believes that the more they hold the securities, the more return they accrue. It has low maintenance costs and trading costs which eventually results in high overall net return of the investment portfolio. Investor using the technical analysis often use patterns, diagrams, and charts to unravel the current market trends with a view of predicting the future trend of the market conditions. By analyzing the patterns, it provides indicators to the impending market movements thereby in a potion sot respond accordingly.

Value investing is also another type of investment strategy that calls of knowing the real value of a give stock. This helps while purchasing the stock to prevent being overcharged or defrauded. Ideally, investors using value investing strategy are deemed to be long term investors and often ignore the constant fluctuations in the unit prices of the different classes of financial assets. Also value investing include understanding the margin of safety, time value, and discounted cash flows. Qualitative measures helps investors to come up with their own custom investment strategies which can be combined with the existing strategies. It involves questioning on the competitiveness of the company management, and its governance. Growth investing puts emphasis on the current value of the unit price unlike income investing strategy.