At the start, we don’t know a lot about investing strategies to investing in stocks.
And beginners know that investing in stocks is important to their financial freedom.
There are strategies for beginners that you can use to invest your money in the stock market.
So, how should I go towards investing in stock? Are there any strategies to invest in stocks? Are there any safe investing strategies for beginners to invest in the stock market?
If these are all your questions, then feel free to read this article.
Tope 5 investing strategies for beginners
Active investing, as its name suggests, You’re the one who finds out stocks, research, and buy & sell.
Overall, you manage your portfolio altogether.
You need expertise in stock research, company analysis, and finding out the best time to buy and sell stocks.
If you can manage your risk, analyze a stock, along the way learn about it, prefer this active investing strategy.
Passive investing is converse to active investing. In a passive investing strategy you buy stocks less often.
You invest in stocks for a long-term purpose, with minimal trading in a stock market.
It’s cheaper than the active investing strategy. Because you trade less often whereby your brokerage charge also gets less.
Because passive investors invest in these types of funds, they don’t have to think about buying and selling, researching stocks, company analysis, and managing a portfolio.
It’s all done by a money and portfolio manager.
Value investing is investing in a stock that is undervalued to the company’s fundamentals.
For example, suppose you want to buy a shoe. In a market, the shoe is selling at Rs 1000.
But somehow you get to know that shoe price is way more than that.
So, you bought shoes for Rs 1000.
As you know, the shoe price is more than Rs 1000, After a few months, the shoe price increased from Rs 1000 to Rs 10,000.
At selling at Rs 10,000, you made a profit of Rs 9,000.
Value investing is also all about that, finding a stock that is trading at lower than its actual price.
Warren Buffet and Benjamin Graham, the great investors of all time, value investing is their favorite strategy.
Benjamin Graham is the author of the best book of all time ‘The Intelligent Investor published in 1949.
Despite being published in 1949, The Intelligent Investor book is still considered one of the great books on value investing.
If you Love the value investing strategy, make sure you read the intelligent investor by Benjamin graham.
Because growth investors can take more risk, they look for an emerging industry that has growth potential.
In value investing, you look at companies that are trading at discount.
However, in growth investing, you don’t care about the stock price.
Because growth investors know at the end it will grow if you choose the right company.
Coffee Can Portfolio
Coffee can portfolio is also somewhat same, in which you buy and forget investments till 10 years or more.
From your diversified portfolio, some stock might go bankrupt, some are medium growers, or 3 to 6 multi-bagger or outperformers.
Those multi-baggers or outperformers will provide the most capital appreciation.
These are the top 5 best investing strategies for beginners. Choose a strategy based on your investment goal and risk tolerance.
If you’re young, then you can focus more on growth investing, coffee can investing, and active investing.
As you grow older you can become risk-averse and would choose strategies like value investing and passive investing.
If you’re young then I highly suggest you take more risks and choose strategies where your profit-making potential is more.