Investing without having one or several investment strategies is crazy. You knock and move your money based on forebodings or news without investment. It is something like that can you can lead to one place.
I will tell you about the three best investment strategies to grow your money, basically focusing on the stock market investment. Also, I will briefly discuss other strategies, some known and others not so much. If you are wondering what to do with my money, this article will be perfect for you.
The importance of investment strategies
When you want to go somewhere, you have to have a strategy, because if you started to walk randomly, you would never reach your destination. When you have a child, you have to have a strategy to educate him. If you give him a different message every day, he will never know what to do. And, if you are going to cook a specific dish, you also have to have a strategy. Otherwise, you will end up eating something horrible.
The same happens when you want to invest your money. If you invest in the crazy without a clear investment strategy, you will surely never see your money grow. In the stock market, your worst enemy is feelings.
That fear that makes you sell when everything goes down, and you should buy, and that greed that makes you buy when everything goes up, and you should stop. And the best shield against feelings is a clear, mechanical, and straightforward strategy. This strategy does not depend on your mood or what appears in the newspapers.
How to choose a good investment strategy
Of course, not worth any investment strategy. Having a strategy is essential because if you don’t have it, you will surely fail when you start investing. The problem is that there are many investment strategies, and some can make you lose a lot of money. It is essential to analyze the options available and choose a strategy that fits your profile as an investor and you as a person—returning to the example of food.
Imagine it’s Sunday, and everything is closed, and you want to cook something, and someone tells you to make a paella. You start eagerly, but you realize that you don’t have rice, and you don’t have any broth either. You begin to improvise, and in the end, you get something that is neither paella nor anything else. It’s not that you don’t know how to cook paella. It’s that you didn’t have the right tools and ingredients.
- The same goes for investment.
- If you keep the first strategy you find, it probably won’t suit you.
- Imagine that you discover value investing, an investment strategy that I will talk about later.
- In short, buy undervalued companies and wait for the market to value them to sell them.
- Very pretty.
- But, without a doubt, a strategy that requires a lot of dedication and a lot of reading.
- You have to analyze the companies thoroughly, read their balance sheets and income statements, and much more.
You start eagerly, but you have never really learned to analyze companies. Also, you work from 8 to 8, and when you get home, you don’t feel like studying, and you end up buying companies that you think are good or that you have read around.
Many investment funds follow the value philosophy, and managers and their teams spend all day analyzing and studying companies, and yet many fail.
Risk Vs. Reward
You are at risk while investing money. There are many investors’ stories as they faced investment loss during the Great Recession or Depression. Despite this, you can’t eradicate the entire risk, but it can be a little bit possible when you invest wisely. Like a retirement account, the earlier investment gives you a long-term benefit. Quick-fix stock is riskier than these investments. People are doing this as they don’t know the reason for their actions.
There is no harm in such investments as you will lose little money on a bad investment. You will earn maximum money with time as you start your struggle early.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.