What are the Best Investment Strategies?
If you are new to investing it can be hard to know where to start and how to actually make money.
But there are some simple Stock investment strategies that have proven to work. Below are some common Stock investment strategies.
One of the best investment strategies is to invest in large stable companies that pay “high” dividends. Look for a company that pays between 5-7% in return/year. Plus any gains in the stock price, this could easily add up to 10-12% / year and in relation to the risk, 12% is a good annual return.
This investment strategy is very simple but very effective, a lot of top investors use this long-term investment strategy, and eventually, you can live off the return.
Let’s say you have 1M in saved capital a 10 % return will give you 100k, if you reinvest this money you will make 110k the next year. This is called Compound Interest. If you keep investing all the money you make you will be able to live on the money you make in return.
That is why rich people just getting richer.
”If you got the money it’s easy to make money”
Buy and hold
These Long term investment strategies are based on the fact that the stock market always increasing. By looking at historical data, it’s easy to see that the stock market has got a steady growth.
This investment strategy is based on trying to buy low and sell high, by attempting to predict future market price movements. Backtesting usually shows that this type of investment has a negative result. Or it results in a lower return compared to the above investment strategies.
This investment strategy is based on Technical Analysis and using technical indicators to find out what direction the market will go. There are two types of trends, positive and negative trends.
To find out the current trend you can use a technical indicator named Moving Average, usually, you use 100-200 days Moving Average to find out what the long-term trend is. To find out the short-term trend you use the 20-50 days MA.
The basic idea of value investing is buying stocks at less than their intrinsic value. To determine a companies intrinsic value you have to make a fundamental analysis which consists of analyzing the company’s finances and annual reports. Then you are able to calculate ratios, which then can be used to determine the value of the company.
So, these were the best Short term investment strategies, and Long term investment strategies. Hope it helps 😉
I offer these data and analysis just for information, and for educational purposes. If you're investing or trading please do your own research before making any trading or investing decision.
Stock, Stock and Stock was the only thing that kept going through my mind the whole time, I started learning it, and in little or no time, I learnt a lot. I decided to focus less on my 9 to 5 job and ended up making this blog. I turned my passion for Stock investment into my work, and I am glad I took that step to change my life for the better and excitement 😉