The strategy of investing in the ordinary shares
The investor chooses shares in accordance with its investment objective. In fact, all of the goals investors can be reduced to three main: the preservation of capital, capital accumulation, the receipt of current profit.
To achieve these goals, investors have resorted to a variety of strategies. Among them we single out the following:
- the strategy of long-term possession;
- a strategy for achieving high returns on invested capital;
- the strategy of long-term growth of the investments;
- aggressive portfolio management;
- the strategy of speculation.
The strategy of long-term possession
This strategy elect investors, whose main aim is to preserve the invested capital. The funds are placed only in high-quality shares, which circulate in the market not less than 15-20 years and have irreproachable reputation. Such shares are purchased for a term of over 10 years. A significant part of the profit, received in the form of dividend payments, is used for the replenishment of the investment portfolio as good or to the same shares. This strategy is often used different pension funds.
A strategy for achieving high returns on invested capital
This strategy elect investors, who use the shares as a source of current profit. For them is essential a reliable supply of dividends. For this purpose they buy the reliable and profitable shares. Since the main objective of the investors who act in the framework of this strategy is to obtain high and stable return on invested capital, it is not necessary that the shares had significant rates of growth. The main thing - the reliability of the shares and high dividend income.
Strategy of long-term investment growth
This strategy allows the highest level of risk in comparison with the previous two, as well as a relatively high trading activity, which is a relatively large number of transactions.
Bought shares of large, reliable and successful companies. The portfolio of shares is periodically reviewed, and changes its composition - bought promising new shares and sold those, the potential of which, in the opinion of the investor, to a large extent exhausted.
Dividends in this strategy are examined as the additional source of income, because for many shares growth they do not get paid.
Aggressive portfolio management
Aggressive portfolio management is very similar strategy of long-term investment growth. The difference is only in temporary borders. If the investment horizon of the previous strategy is 2-3 years, then if this strategy the investor expects to receive the same profit for 8-10 months. Accordingly, this increases the requirements to the investor. It should be given a lot of time to analyze the market and shares, to continuously monitor the state of the economy, to understand the development of the investment process, have appropriate personal skills.
Range of investment instruments, which are used during the work as per this strategy, and the strategy of long-term investment growth, a similar profitable growth stocks, shares preservation of capital, but the trading activity of the higher order.
Speculation strategy
The most risky strategy, which can bring you a fantastic profit, and so catastrophic losses, up to complete destruction. It is, rather, a game, and not investment, because the process of the analysis of companies and market departs on the second plan, and sometimes no. To the fore the knowledge of market psychology, own psychological stability and composure, as well as the ability to apply some methods of technical analysis.
With the development of the Internet in recent years, many investors have direct access to trading on the U.S. stock exchanges and the NASDAQ system. In connection with this, the so-called day trading (trade within the trading session), then there is a method of trade, in which investors catch the changing of the rate of shares to 0,15-0,25 dollars, has gained a lot of popularity. In choosing such a strategy, for one trading day, the investor can spend a few tens of operations on purchase and sale of the shares. If someone who reads these lines, there was a strong desire to try day trading, we strongly recommend that you first make transactions on virtually äåìîñ÷åòàõ not less than six months and then once again ask yourself: «should I do this?
