There are many investing strategies and all can be used in many different types of markets. All that depends is what type of investor are you and that can relate to the market strategies that you use. Now there are hundreds of strategies that are used in the market, some are more successful than other, and I am going to tell you about a couple of the most common:
- Buy and Hold: Maybe the most common and most known strategy of them all, Buy and Hold. The Buy and Hold strategy is the most common but (to me) it might be the most effective. Now Buy and Hold strategy is simple so I'm not going to get very deep. It is just like its name, you buy a stock, then hold it long term, and hopefully get gains.
- Diversification: Now diversification is not only a strategy it is something that you must have in your portfolio. Now there are many ways to diversify your portfolio. The first and most common way is through sector diversifying. This is where you diversify the portfolio based on the different sectors, and might be the best way of diversifying. Reasons: if you have 50% of your portfolio in Finance and that sector takes a long dip then you don't have other successful sectors balancing out the losses. The next way to diversify your portfolio is through market capitalization. Now I don't seem to think that this is important as market caps don't usually trend with other stocks of the capitalization like sectors. Next and a very successful way to diversify your portfolio is by using ETF's. But when using ETF's, you must make sure that you don't use the same companies ETF's or your just canceling the diversifying you are trying to implant. Now these are some of the more common ways to diversify but there are many more ways. But there is a risk when it comes to diversifying your portfolio, it is called over-diversification. Now this occurs when you diversify way too thin and your portfolio won't have a strong ground (This is what happened to the Roman Empire, they spread to thin and where easy to beat because they didn't have a foundation in the lines).
- Ex-Dividend Date Buying: Ex-dividend date buying involves gaining money by buying a stock the day before its Ex-Dividend Date. Even though you don't get the dividend for another 2 weeks you still are insured money. But my problem with this strategy is, what is the good of a $0.23 dividend if the stock goes down $0.53. So your getting money but not as much as your losing, this is why I don't recommend it.
These are all successful strategies and they all have their downsides. But the key to figuring out what strategy will fit best for you is to figure out if you are a conservative or risky investor, and then determine what would work best for the type of investor you are for your age.
Next you need analyst strategies; 'how are you going to pick stocks?'. Well there are many ways to pick stocks and here are some strategies:
- Fundamental Analyst: Fundamental analyst is doing judgment of a stock using annual reports, earnings (which are found in the reports), news reports, and growth. It is very successful as good earnings and growth usually will send the stock up. And if you read annual reports it will have new clients that will boost up revenue. It also has downsides, because people can have a different thought about news that you thought was good, and annual reports, despite their size, are very broad, and annual reports also leave out most of the bad things like disapearing clients and bad rep.
- Technical Analyst: Technical analyst is using advanced charts to find trends in a stocks historical price (for advanced charting go to Finviz). It can help predict if a dipping price will rise again or continue to fall by looking at times in the past when the price did take a small dip. But the problems with it is mostly that problem that a dip will not always go up again like it happened in the past, or in simple terms, it doesn't always follow the historical trend.
Now to find your analyst strategy will probably be easier to find once you find your investing risk (conservative or risky) and your investing strategy. These too strategy types are the first thing you need to figure out to invest in the stock market and then you need to make a plan, and this plan must follow the type of investor you are (conservative or risky), your analyst strategy, and most importantly your investing strategy.