1 Growth Investing-
This kind of investment strategy is all about trying to identify the companies that have a history of high growing earnings. If you are in a position and of a disposition to take on high levels of risk, this might be the strategy for you. Technology stocks in the decade of the 1990s fit this category. The growth company may start with little capital, but is based on a great idea. If the company can lure investors, the outcome can be very good for investors. There is the potential of high reward in a climate of high risk.
#2 Income Investing-
Do you see yourself as a bit more conservative than the qualities needed in growth investing? This approach is based on identifying companies, often well-established, larger companies that can be pretty much counted on to pay high dividends. This strategy protects the investor, in a manner of speaking, because the investor takes a conservative stance rather than exposing his portfolio to high risk investing.
#3 Value Investing -
Do you see yourself as an investor who is out to find the buried treasure? That is, are you wanting to uncover potentially valuable stocks that are hidden in the market? Do you look for a stock that has been overlooked and undervalued?
This sounds like an adventure, but it requires some technical analysis because it can be difficult to discern when a stock's price to earnings ratio is truly and indicator that the stocks that are currently at a low price will rise as the market sees the value of the company and that stock price will bid up to its destiny as a more valuable stock later on.
Figuring out your investment strategy is a matter of coming up with a composite of the considerations described here. Risk remains a formidable factor.
These three investment styles can result in financial success for an investor, but do not lose sight of you level of risk tolerance. Honest answers to these questions will enable you to construct that composite of your own investing characteristics. Together, they will be the qualities of your investment style.
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