There are different types of investing strategies according to the so-called “experts.”
This article shares some of them. Aside from the strategies mentioned in that article one of the other biggest difference in investment strategies are day traders’ vs people who buy and hold stocks. Day traders are people who buy and sell stock within a day hoping to take advantage of stocks going up in value during the course of a day. Investopedia says that some liken the strategy to gambling and I don’t have the time, energy or interest in that so I prescribe to the buy and hold strategy.
I buy everything that I buy with the intention of holding on to it. Aside from the buy and hold vs day trader strategies, I think there are a lot of things that go into the strategies I use when considering how to invest my money in the stock market.
For example, I am slowly diversifying what I own between different Stocks, Exchange Traded Funds, Index Funds and Bonds (I don’t own any bonds yet but that is what I plan to buy next) so that I am not dependent on any specific investment. Although right now I don’t have a specific percentage of each that I am trying to own but at some point way down the line as I get further into the investment world I will consider trying to be more specific about the percentage I own of different type of investments.
Aside from that, if I narrowed down the principals that use when deciding how to grow my investments (aka what I call my investment strategy) it would come down to the following:
- Don’t overthink things, just get started: It is so easy to put off getting started because you feel like you don’t know enough. You are shortchanging yourself if you do this. I did not know much about investing when I got started but I heard people say Vanguard was good and many people mentioned the S&P 500 Index-Fund as a good way to invest so I just went for it. Since then I have bought other stocks and funds and will continue to research new things to invest in but I am glad I didn’t wait because I would have lost out on the money that I have made in the meantime. Also, I still believe investing through Vanguard is great and the S&P 500 is a solid investment so I will likely keep putting money into that fund.
- Consistently invest even if it is a small amount every month: When I quit my job and we started living off one income I considered putting a hold on future investments. I realized though that even if I was just contributing $100 a month that would be worthwhile so I have kept investing and I am so glad I did because the value of our investments continues to grow.
- Always try to learn something new about investing and the market: I follow multiple investment accounts on Instagram and watch at least 1-2 investing videos on YouTube a month. When I hear new terms, I google them or look them up on Investopedia. I am always striving just to spend a few minutes here and there to learn more. The more I learn the easier I realize investing is. They use all of these fancy terms and complicated words in the investing world but once you get the hang of it you will realize you don’t have to be a wall street bro to invest at all.
- Work to learn about and invest in things that align with my values: Although I have invested in the S&P 500 because investing in low-cost Index Funds are what Warren Buffet, who is one of the best investors, recommends I am working to invest more of my future money in companies that treat their workers well and are better for the environment. That can be very challenging. A company can be great for the environment but treat their workers badly. Another company could treat their workers great but not be the best for the environment. There is no way for me to to be perfect with my investments but I am trying to figure out how to at least in some ways invest in my values. I had a call recently with a fund that does Socially Responsible Investing and I found out it is even more complicated than I thought. I’ll share more of that in another post. So far, I’ve invested in Costco and Starbucks because I know they both provide good benefits and pay their workers decently, I also today put $100 into an Exchange Traded Fund called TAN that invests in companies that do renewable energy. If you have any companies that you know are amazing to their workers/environment please let me know in the comment section. I’m on the hunt for my next investment.
As always remember I am not an expert, I am just sharing my journey and working to try to break the stigma that you must be an expert to invest. Do your own research and invest at your own risk.