When we examine the stock market we have that it is one of the places, which represent greater excitement when investing money, since we can find significant gains as long as we have knowledge of how to move and invest obtaining significant gains with investment strategies in the stock market; however, everything must be in a thorough way by the fact that it also carries a significant expense and risk. That is why it is important to know the strategies so that through them we can maximize profits and minimize losses.
Investment strategies: what are they and how many types exist?
We understand that the investment strategy ends up being a group of plans and approaches of investors, who seek to make decisions and maximize profits in the stock market. However, everything depends on a group of strategy that the investor decides to take or study to know which one is the most convenient for his next step. Where the risk levels and also the time horizons must be taken into account. Therefore, we have a list of types of investment strategies as a guide for beginners of effective investment strategies in the stock market.
Value investing
This is based on the search for valued companies that are available in the stock market. These should place an intrinsic value, but in the long term have an almost certain growth.
Growth investment
For these investments to be of this type, they must comply with one characteristic, which is to have a high growth potential in their profits and sales. These are companies that have had their Innovation Program and that have stood out in the market from the early stages of development.
Dividend investment
Basically, this strategy is one of the most used because it is about looking for companies that pay regular dividends to their shareholders. Therefore, each investor looks for those companies that have, as a main characteristic, a stable history of dividend payments. In such a way, verifying that each one of them has the capacity to even be able to pay them in the future. In this type of investment we know that they are the highest, economically difficult to access.
Investment in bonds
It may be the most popular strategy, as it involves the investment phase of buying bonds issued by companies or different governments. They do not have so many risks and each transaction or investment made, have a fairly predictable return.
Mutual fund investment
This type of strategy is an important part of the investment strategies in the stock market, it seeks that investors manage to get a basket, which is in different types of shares, in different areas so as not to have all the investment in a single portfolio.
Effective investment strategies in the stock market.
It is quite wide all that we can recommend for these strategies to be effective at the time of investment, however, these plans or approaches must be as realistic, because it is necessary that the investor always wins and if you lose that it is in the minimum of the possible. Therefore, you must know the important strategies, in order to make these gains a reality.
Diversification
In the practice of investing we should always take into account making investments in multiple types of assets and even sectors or companies. In this way, we can obtain a reduction to the risk of not losing everything by placing a single capital all the investment. To make it even clearer we can say that an investor may have ideas to invest in stocks, real estate, bonds or commodities. Consequently, the immediate risk of concentration in a single industry is reduced. Investors should take into account that diversification would also mean being able to invest in companies.
Research
One of the three strategies known to the world's best investors is to have the time or hire staff to do research on how the stock market is doing and where to invest. Since even in this valuable data you should take into account what is the path of this company during the last years to know the months of rise and also fall, as well as the business model that it presents. After having all the information regarding the company, the investor can make clear and responsible decisions based on this research.
Long-term investment
Market volatility is often unstoppable when it comes to short term investments, so the investor should look for options that, even if they are long term, represent more than 70% certainty that they will be profitable. In the long term the market always has the perspective of growing and increasing the individual's profits, therefore, it represents a better profitability. One of the secrets of investors who decide to opt for the long-term strategy is that they manage to reduce transaction costs and taxes.
Investing in quality stocks
Not all the companies that exist in the market have quality stocks so they are not solid financial fundamentals, that is why investing in those that, if they are, these company investments manage to have in the long term greater resilience and even in the face of recessionary markets and achieve that their investors end up leaving even with profits in these difficult times.
Considering the buy and hold strategy, we know that an investor can use strategies that must be held for a long time in order to work. In this way they make stock purchases, regardless of the volatility that the market has in the short term, since the perspective of the market is completely focused on long term profits.
Among the best things that the stock market brings is the mutual fund, which is the investment in stocks, bonds and other assets. These investors look for the acquisition of these funds, due to the fact that in the profits they get a percentage of them.
