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Thursday, September 29, 2022

Best Stock Investment Strategy – Successful Investor Strategy

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Warren Buffett Investment Strategy

Stock investment can be tricky at first to understand, your strategies may take time to kick in and provide you with enough returns so that you can stick around. The worst thing about stock investment strategy is that there is not definite way to be sure of your investment, apparently that is also the best thing about its – its flexibility. Stock investment strategy need not be fixed and rigid, it should be flexible to change with the position of the market, ensuring and safeguarding your capital and gains. That being said there is always a strategy that brings you steady and safe gains over time.

We have curated a list of best stock investment strategy that you may leverage from. By taking the time to learn about the differences between them, you will be in a better position to pick one that is good for you in the long run without having to change your path.

Active & Passive Investment Strategy

To minimize increased transaction costs, the passive method entails purchasing and keeping stocks rather than trading them often. Because they believe, they will not be able to outperform the market owing to its volatility; passive solutions are considered a safer option for trade. Active tactics, on the other hand, entail regular sale and purchase. People strongly feel that by outperforming the market, they can earn greater yields than the average investor can.

Growth Investment Strategy

Growth investment is another popular strategy that implies investments in assets that have a lot of growth potential in future. Rather than being completely guessing or speculatively betting on the stocks, the investment strategy involves thorough study of the stock’s current health, its affecting elements and its future prospect.

Value Investment Strategy

Value investing strategy is one of the most employed strategies that believes in buying and holding stocks that are believed to be undervalued. Warren Buffet is a known value investor, the investment itself has attracted many other investors, however, given that the time it requires to yield the foretold returns it requires the investors to hold on the shares for a longer period.

Dividend Growth Investment Strategy

The investors seeking income and further reinvestment capital from the stocks may employ a safer strategy of Dividend Growth. This strategy involves investments in time-tested stocks of companies that are known to pay dividends every year. Given the less volatile and stable nature of this strategy it ensures dividends which are reinvested by investors to make profit from compounding.

Contrarian Investment Strategy

Another most popularly adopted strategy for stock investment is the Contrarian investment strategy. The strategy involves investments on stocks while the market has crashed or in a downtime which may be due to many adverse reasons such as war or calamity. The investment is done on the brand value and the stocks ability to bounce back and stunt its competitor’s growth in general.

Apart from the above, there are also different strategies that may suit different investors independently. In all of the strategies mentioned, certain factors remain the same, and an investor need to be vary and aware of these few points:

  • Your investment strategy, whichever you may choose, must be rigorously followed and should have a discipline approach.
  • When in doubt or lack of knowledge of the market, only invest in a stock and business that you are aware of, and familiar with. 
  • Do not guess, but make calculated decisions. Allowing emotions to influence your judgement is not a good idea. 
  • Make a diverse portfolio that includes stocks of different varieties of businesses, so that your capital is safeguarded when one industry is not doing well. 
  • Constantly monitor the performance of your stocks, this allows you to get out of holdings in case you are not in a position to maintain it while in loss. 

What is Value Investment | Best Stock Investment Strategy | How Compounding Works | Warren Buffett’s Investment Strategy

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