A Choice of Strategies
12 February 2024
To all Financial Friends
Whatever happens there are always profits to be made by investing in the Stock Market. Sometimes traditional investment models are sufficient. In the volatile markets we face today thinking of your strategy, seeking to protect and/or seeking profits is worthy of consideration. I have prepared a document considering a choice of six different strategies commencing next Monday 19th February when I will send you details of the first strategy. From Tuesday through to Saturday you will receive one strategy each day.
Below I give you the heading of each strategy with a brief outline of their objectives:
Diversification
Here your investments are spread over the basic range of investments. The aim is to achieve growth over the longer term spreading your money over different assets to help reduce risk. Past history shows modest returns over the longer term.
The 60/40 Model
This could be higher risk than the diversification model as 60% if your funds will be in equities and 40% in the fixed interest market. The fixed interest market is where you lend money to the government and businesses. The idea is that when equities fall your fixed investments will rise. However research is showing that this model may not be deemed as safe in today's fast changing world.
Profit Takers
Some students are already enjoying using the volatility of the markets to achieve short term profits. They have learnt to take profits from individual assets that they hold with money going into their bank account within three to five days. Of course investments rise and fall in value so short term profits are never a certainty.
Accumulators
Some investors fear a stock market tumble and choose to protect their investments. Their strategy holds limited funds in equities and the bulk of their funds in money market holdings. They drip feed money every month into their equity funds which can, in volatile markets, achieve a good return. Meanwhile, the balance of funds are held safely so that when and if the markets take a steep dive the money can be invested into equities at a low price, eventually leveraging significant gains.
Defensive
This model looks at the threat of war as well as other factors like the threat of global warming and further pandemic risks. Investors with this mindset use defensive holdings that should rise in value if some of these fears are realised.
Go for Growth
Some investors take the view that over time, equities are always the best investment. The investor with this mindset will stay with equity investments, prepared to take the shock of a market downturn. They are prepared to ride the highs and lows of the market seeking a good return in the future.
Action Now?
The daily emails should be collated to form a future reference document for you. However if you want to act now - go right ahead and arrange a Zoom meeting with me http://www.calendly.com/yourfinancialfriend and we can talk things through.
PLEASE NOTE: A financial or economic commentary like these, are written to explain, interpret or give an opinion on economic events and markets to help readers understand what’s happening and why it matters. Designed to help you make informed decisions of your own by making you aware of opportunities, risks and potential rewards in the market.
