Investment Strategy

By Author: alexander
Total Articles: 10
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Investment strategy - preparedness for the next mojo bull market

The bull market times that were with us decades long before the Pandemic now seem like a distant memory. The markets have since become sober. We daresay ‘bearish’. Opinions across the spectrum may agree on some points and disagree strongly on others. What common investors know is that now is hardly the time to get proactive on the market. Rather, there are a number of strategies that would help the common investor regain his financial health so that when the bull market does make its appearance next, he will be able to cash in on better market conditions. We seek to build an investment strategy, therefore, that aids preparedness for the next bull market

Measures for gain preservation

Recuperating and recovering our strength, we need to take gain preservation measures. Though we are not necessarily afraid of market pullbacks and bearish trends, we just have to be prudent and know which investment methods will tide ...
... us through the Pandemic Era.

Holding on to shares

Selling during a correction or a bear market is a big ‘no-no’. You had, after all, promised to ‘buy low and sell high’. Panic selling would be the last straw. Then, your paper losses could become all too real. Buying back into the market would be excruciating, too. Not to mention all those missed dividends that ought to be rightfully yours. All of this begs you to hold on to your shares - that’s a stock market strategy right there!

Set cash aside for a rainy day

Just for times of distress like this - it is advised, like a strategic investing decision - that you have a percentage of your wealth that’s not in the stock market. Rather, a percentage of your wealth should be readily liquid, for covering sickness costs, for instance. You ought to always have a year’s worth of cash ready at hand, wealth in liquid form. Converting shares at unencouraging times is not prudence.

Bargain shopping at the exchange

Even a bear market could be the place where you try out your best investment strategies. At least, you cannot deny that this is a market for discounts. It does make sense to believe that you can get great discount deals on leading stocks when the Index is down in the dumps. So why not bargain shop, even though at drip-feed speed? At some point, the bull market shall return. And we will have enriched our portfolio by then.

The right balance

Diversification is one of the best stock investment strategies. In fact, a market that’s down in the doldrums gets a hand in glove with diversification.

Regarding balancing - at times like the present, some of your dearly held assets are said to be underperforming, while some assets that you ignored in the past are said to be performing rather well. In any case, it is prudent to sell some of your overperformers and buy some of the emerging stocks. The right balance between overperforming and underperforming assets has to be struck, particularly with an eye on portfolio asset allocation. Getting that diversified portfolio makeover might stand you in good stead a year down the road.

Long term perspective

The economic cycle decrees that there shall be volatility. All types of investment strategies will be of little avail if you don’t understand the recurring nature of volatility. So you have to keep building up our strength for high conviction stock collection until the markets feel normal again.

Stock investment strategies: approaches

Your financial situation, investing goals, and risk tolerance determine the choice of Stock investment strategies.

Value investing

A value investor generally buys into strong companies trading at the current time at prices so low as to be quite the opposite of a true reflection of the company’s true value. So, for example, designer brands at great discounts - is one way of looking at value investing
As mentioned above, bargain shopping is one of the best stock investment strategies.

Growth investing

Though otherwise similar in their views and outlook, growth investors are differentiated from value investors in that their focus is on relatively younger sectors/sector players showing promise of considerable growth in business and profit. Unlike value investors, these investors chose to buy a stock that is calibrated higher than its intrinsic value at that time. They do this because they believe that the inherent value will keep continually growing, thanks to a continuously high growth rate.

Conclusion

The investment strategy you use has to be a reflection of the times you find yourself in. although the sky is overcast, yet, given time, there shall be clear skies again. The main thing is to have the fundamentals firmly in place. Then, per your resources, you ought to be able to practice some portfolio rejuvenation, injecting new blood into it even as the markets inch their way towards post-Pandemic normalcy.