Investing Strategies
Successful investing requires hard work. There is no magical formula that will instantly make you rich. And there is not one investing strategy that will always work without exception. But there are investing strategies that over time will increase your wealth if applied consistently.
This page offers investing strategies that will help you build up your wealth over time. Some investing strategies work better than others during different period of times.
Investing is not an exact science like math or physics. The market is made up of individuals with different opinions, expectations, and mindset. The market is a dynamic place representing the sum of all buyers and sellers.
Markets are forward looking and change based on peoples expectations. Markets do not care about the past and they are only interested in tomorrows news and tomorrows earnings. Changes in expectation will quickly move stock prices whether those expectations are real or not.
Markets are not perfect. But free markets is the best process currently available for allocating capital and far better than centralized control that was witnessed in recent totalitarian regimes. Markets are based on the latest public sentiment and they often misprice assets both on the upside and on the downside. If markets were perfect there would be no opportunity for investors to make an above average returns.
Markets like everything else follow fundamental laws. The economic law that governs markets is called supply and demand. Supply and demand determine both the price of a particular stock and the price of the entire market. All successful investing strategies are based on this fundamental principle.
In this page we will explore different investing strategies. Keep an open mind, there is no rule saying that you only can use one of these investing strategies. Use what you feel comfortable with. Many of the really successful investors use a combination of strategies. Warren Buffett has been known to be a value investor, a growth investor, and a contrarian investor among other things.
Value Investing An investing strategy that involves buying securities below its intrinsic value and holding them until the price corrects to its fair market value. Warren Buffett has been a lifelong practitioner of this strategy.
Cycle Investing An investing strategy where investors make investment decision based on market cycles. By studying market cycles and understanding the characteristics of a cycle an investors can estimate where investment is heading in the future.
Focus Investing An investing strategy that is based on the idea of keeping a close watch on a narrow selection of stocks. Only picking the very best companies and researching that selection carefully.
Macro Investing An approach that attempts to anticipate and profit from global trends and shifts in world markets.
