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Top 5 Best investing strategies for beginners

investing strategies for beginners

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.

In this article, you’ll look at the top 5 investing strategies for beginners to invest money in the stock market, followed by books suggestions to learn more deeply about those strategies.

Tope 5 investing strategies for beginners

Active investing

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.

How to make money in stocks, is the overall best book about stock investing strategy. Read this to start your investing journey.

Passive investing

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.

Usually, passive investors invest in Exchange-traded funds (ETF), mutual funds, and index funds.

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.

The best books about passive investing strategies for beginners are ‘Stay the course’ and ‘The little book of common-sense investing.’ Both books by John C. Bogle.

Value investing

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.

Growth investing

Rather than investing in well-established companies like blue-chip or large-cap companies, growth investing focuses more on small-cap or micro-cap companies.

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.

The best book on growth investing strategies for beginners is ‘One up on wall street by Peter Lynch and 100 baggers by Christopher W. Mayer. Both books focus on multi-baggers.

Coffee Can Portfolio

You may be heard of the buy and hold strategy in which you hold a bunch of assets and hold indefinitely.

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.

Coffee can investing’ by Saurabh Mukherjee is the best book you should read on coffee can investing strategy.

Conclusion

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.

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