» Stock Trading Strategies and Systems » Selecting Your Investing Strategy

Selecting Your Investing Strategy

Stock investing is considered as very complex by most people. However, it is not that difficult and it all depends on you whether it will be complicated or not.

Most people are discouraged from investing in stocks, since they consider that they will have to make complex analysis. They find it cumbersome the study of financial statements, different reports, spreadsheets and market analysis. All these are really needed in order to make good investment decisions but this analytical approach is not the only available alternative.

Many investors have failed despite the thorough researches and analysis. Thus, you should not be discouraged from investing if you lack the time and financial background. The following advices can be given for those of you who lack the knowledge or time to make thorough analysis.

Set Limits

If you are interested in a particular industry, select a particular sector that falls in this industry. After this concentrate your investments in the leaders of this sector. You should consider only market leaders. This is recommended since price leaders may quickly lose their positions and leave you with losses.

Invest in Growth Stocks

If you are a growth investor, then select industries that fall in this category. As simple as it may seem, try to focus on industries that have potential for growth, such as technology oriented companies. Try not to deviate from your objective and invest in a successful, but going nowhere company. In this way you are not only wasting time, but money as well.

Select Market Leaders

Market leaders are companies that hold a significant portion of the particular industry. You should select companies that are firmly established in their sector. They are hard to be removed from their position. An obvious example is Microsoft, which has well-established name and reputation. As a result of their dominance, it is hard for their competitors to remove them from the top. However, you should apply caution when selecting a market leader since no one is ensured from being replaced. An obvious example is GM, which 10 or 15 years ago was considered a market leader with strong potential.

Finally, no matter what strategy you select, it should strictly conform to your investing style and goals. You should feel comfortable with it and stick to it. 

Rate this article : Low
  • Currently 2.9/5 Stars
  • 1
  • 2
  • 3
  • 4
  • 5