Source: Pixabay
There are so many different roads that an investor can use to become financially secure that, even if I actually knew them all, it would take days to list them all! I do know that there are a handful of approaches that most people choose, so I will just list them:
- Stock picking based on the fundamentals of a company, or the technicals that many day traders use
- Momentum trading, which means to me when a stock is on a hot streak, investors hop on for the ride
- Day trading, which means never investing in a stock, but picking one that fits a particular trend and buying and selling within each day.
- Following the herd investing, which to me means it happens to be a popular stock, or an IPO, or a strong sector; tends to be trend investing, not for the long term
- Contrarian trading, which to me is going against conventional wisdom and buying stocks for large rebounds and short-term gains
I left off dividend growth investing because that is the approach I am focusing on. So I will go into more detail, in my own simple way, for folks to understand how I define it.
Dividend Growth Investing
The popularity of this long-term buy-and-hold strategy has lots of traders calling it a "cult," and in some ways it might be! I know I wouldn't invest any other way, and I have tried them all over the last 50 years. So I am part of the "cult."
I believe it has been so popular for decades now due to the fact that for investors who know what they want, and focus on the rewards, the strategy has actually been shown to work.
Here is a simple definition from this website:
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