Investment strategies, how to choose the right one for yourself?

Let’s talk a little about why it is impossible to act spontaneously in the stock market, what a well-thought-out investment strategy is for and how to choose it.

An investment strategy is a clear plan of your actions on the stock exchange. It takes into account for what purpose and for how long you want to invest money, how often you intend to make transactions, what you will focus on in your decisions, what profit you expect and what losses you are ready to put up with. A clear strategy will help you build a balanced investment portfolio, avoid rash decisions, and therefore reduce the likelihood of losses.

1.You need to define goals. Why do you want to invest, how much are you willing to invest and when exactly do you need the money.

2.Set the term of the strategy you choose: long-term — the return on investment is not earlier than in 3 years, medium-term — investing from a one year to 3 years short-term — you want to withdraw money in less than a year.

3. Estimate how much time you are willing to spend on investment. If you are not ready to constantly monitor changes in the financial markets, read news and study company reports, your option is a passive strategy. There is no need to devote much time to analyzing the current situation. However, even with a passive approach, one cannot simply collect a portfolio and forget about it.

4.Decide how much risk you are willing to take. According to the level of risk, investment strategies are divided into conservative, moderate and high-risk. Generally, the greater the potential return on an investment, the more likely it is to lose everything. Most investors still prefer a moderate strategy. It involves the choice of financial instruments with different levels of risk. For example, a third of the money can be invested in the most reliable bonds — the state and the largest companies, as well as in precious metals.

What investment strategies do you choose?