Investment strategies - Stocks

To get success and earn money from your stock investments, it is essential that you have your strategies in place and the discipline to follow them

You must also know the background of the investment strategies, so you can adjust your stock holdings in relation to changes in the outside world

Some investment strategies will help to identify which stocks have potential, others are used to build efficient portfolios of stocks, so the risk is minimized and the return and profit increases

In addition you must know a number of analytical tools that are well suited to capture changes in the stock market, so you can react quickly and minimize losses or step in quickly when the stock markets begin to rise

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Portfolio Strategy

Market risk

Upturn after the crisis

Historical bubbles

Portfolio strategy

Portfolio theory describes an investment strategy that enables you to put together your inventory of stocks, so the overall risk in the portfolio is minimized, while potential returns on investments are maximized

The stock pyramid

The stock pyramid is a tool, that helps you control the overall risk in your portfolio

Stop loss

Stop loss is not a complete strategy, but has to be seen as part of your overall investment strategies

Buy and hold

Buy and hold is a simple but efficient investment strategy. No matter what happens with the stock markets, the buy and hold strategy implies that you will win in the long run

Buy and sell - Day trading

Day trading is an active investment strategy, where you uses the small everyday changes in stock prices to gain a profit

Stock picking
Stock picking is about choosing the strongest companies in every sector. According to this investment strategy these stocks will in the long run bring a higher return as the market index

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Value shares

If you are a conservative investor who likes to see a stable return on your investment with limited risks of major decline - and the corresponding limited opportunity for large increases - then the value shares are quite right for your investments.

Growth shares

Growth shares has to be found among companies with relative low earnings today but with the potential to increase returns, e.g. because of success with new products, new technology or changing market conditions. The pharmacology companies where the approval of new product is  decisive, are often to be seen in this investment category

Contrarian

The contrarian investor goes against the market. The philosophy is that the market is hysterical and tends to overreact. This implies that when a share becomes popular the price rises to much and for the unpopular companies the prices falls to much. Hence a portfolio of unpopular shares will have a larger growth potential with a lower overall risk than a portfolio of the more popular stocks

Index funds

It is not possible in the long run to out-perform the market. This is the philosophy behind the index funds. Instead you get the best investment return with minimal risk by shadowing the market index