There’s an old saying that a trained monkey could do a better job than many actual investors do. A recent study conducted by a mathematician seemed to indicate that a portfolio of stocks randomly chosen off of an exchange list could outperform many people’s carefully crafted portfolios. This shouldn’t be taken as an encouragement to invest randomly, but rather it helps to illustrate how many people invest without having a solid strategy. Learning about investment tactics is important for anyone who has money invested in any kind of trading account.
Buy and Hold Investment
The most popular serious strategy is often referred to as the buy and hold style. This involves buying shares in a company and not selling them for a very long time. Some investors believe that market timing strategies simply don’t work, but it might be more accurate to say that they don’t work for small retail investors.
Equity markets offer decent returns over a long period of time, though investors are often discouraged by short-term dips in the market. Still, this strategy is considered the safest for many people as long as they buy stocks at the right price. Continue reading