Investment strategy is actually the plan, which is followed by an investor to make profits and to achieve financial stability. Based on this investment strategy the investor identifies the areas where the money can be invested safely. At the same time the returns from that money is also of equal importance.
The investment strategy also helps the investor to reduce the risk factor from the investment portfolio. Now several investment options are available in the market. There are thousands of people who are making money from these options. Again, there are also a large number of investors who are facing losses everyday.
This means that if the investment is done in a proper manner, the profit can be made from every possible medium otherwise the result may be the opposite. But to make the investment successful, an investor needs to do the homework properly. He or she needs to follow that market closely in which he or she wants to invest.
There are several sources like the financial market news, several journals, internet and many more that can provide vital information about the financial market. These information are very important to form a strategy. At the same time, the financial planners can also provide assistance to form an investment strategy, which suits the need of the investor.
Before planning a strategy for investment, one needs to be sure about the aim of his or her investment. One needs to decide about the desired returns and more importantly the amount of risk that he or she can bear. These factors are going to decide the suitable medium of investment for the investor.
The investment medium may be anything, the investment portfolio of the investor should be diversified. Investing in one single medium may increase the amount of risk. In multi-investment, the risks related to one medium are covered through another one.
The two basic investment choices are the stock market and the bond market. The stock market is full of different types of shares and options. All these shares are different from each other in many aspects like the amount of risk and the pace of growth. Now, the investor needs to follow a certain investment strategy to invest in this market. The investor needs to choose some specific shares in which the money would be invested. At the same time, the investor should also buy some options to minimize the amount of risk involved in the shares. The bond market is not so complicated and so the strategies are very simple.
Last Updated on : 5th July 2016