Investment Strategies

Investment strategies and styles are different from person to person. All of the different investment stategies have one thing in common, they seek to achieve investment growth over time.

In this section, we will list and discuss some of the different styles of investment strategies.

Fundamental Analysis Fundamental analysis of a business involves analyzing its income statement, financial statements and health, its management and competitive advantages, and its competitors and markets.

Technical Analysis Technical analysis is the study of past financial market data, primarily through the use of charts, to forecast price trends and make investment decisions.In its purest form, technical analysis considers only the actual price behavior of the market or instrument, based on the premise that price reflects all relevant factors before an investor becomes aware of them through other channels.

Value Investing Value investing is a style of investment strategy from the so-called "Graham & Dodd" School. Followers of this style, known as value investors, generally buy companies whose shares appear underpriced by some forms of fundamental analysis; these may include shares that are trading at, for example, high dividend yields or low price-to-earning or price-to-book ratios.

Growth Investing Those who follow this style, known as growth investors, invest in companies that exhibit signs of above-average growth, even if the share price appears expensive in terms of metrics such as price-to-earning or price-to-book ratios.

Index Fund Investing An index fund or index tracker aims to replicate the movements of an index of a specific financial market.

Speculation Speculation, in the narrow sense of financial speculation, involves the buying, holding, selling, and short-selling of stocks, bonds, commodities, currencies, collectibles, real estate, derivatives or any valuable financial instrument to profit from fluctuations in its price as opposed to buying it for use or for income via methods such as dividends or interest.

Short Selling In finance, short selling or "shorting" is a way to profit from the decline in price of a security, such as stock or a bond.

Trading Stock Options In finance options are types of derivative contracts, including call options and put options, where the future payoffs to the buyer and seller of the contract are determined by the price of another security, such as a common stock.

Dollar Cost Averaging With dollar-cost averaging, your average price per share will be toward the lower side in the long run. It is good for small amounts of money, such as $50 or $100. When you dollar-cost average, you will be able to buy more shares at a lower share price.

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