Since investing is far from a safe bet in many instances, it is somewhat similar to playing a game where the outcome is unknown until the game is ended and a victor declared. However, much like playing a game, investing requires having a strategy if you aim to be successful at it.
Essentially, an investment strategy is a plan for how you plan to make your money go to work for you by putting it into various investments which will allow your money to grow over time. Every different type of investment calls for a different strategy, since all have different elements which must be considered. For instance, think of a clothing store – while obviously, clothing is their stock in trade, they sell different items; shirts, pants, dresses and so on. The stock market is one type of investment, but there are many different stocks and many different companies you could choose to invest in.
Investment is a field which can get very confusing very fast since there are just so many kinds of investments out there and within them, so many individual investments to think about. Here is where your strategy will come into play, along with your risk tolerance and your style of investment.
If you’re new to investing, you should work with a financial planner to come up with an investment strategy which will fit your needs financially and also fall within your parameters for acceptable risk before you make any investments at all.
Before determining your financial goals and an investment strategy to meet them, you should not invest. Never hand over your hard earned money until you know where it’s going and when you’ll get it back. Investing without a plan is doing exactly that – so always set a goal and come up with an investment strategy to met that goal before you begin investing.
Author: M TaylorThis author has published 6 articles so far.