| Capital growth investment strategy is a widely | | | | most (all) of the capital to equities achieve |
| accepted and followed portfolio management | | | | diversification by investing in different industry |
| strategy. As the name suggest, the strategy | | | | stocks, different markets, using derivatives to |
| aims at capital growth, maximizing portfolio value, | | | | hedge risks, and by investing in both high growth |
| over time. Before we start, here is the danger | | | | high risk stocks and low profit low risk stocks. |
| signal - capital growth strategy is a high risk | | | | Capital growth investment strategy is a long-term |
| investment strategy which requires great | | | | strategy, which may or may not require periodical |
| investment discipline and money management. | | | | reassessments and rearrangements of portfolio |
| A portfolio which follows capital growth strategy | | | | allocations. Investable stocks are found using |
| is mainly comprises of equities. Often more than | | | | various growth investing tools and strategies. |
| 60 to 70 percent capital is invested in stocks, | | | | Active portfolio management is recommended for |
| preferably growth stocks. Remaining portfolio can | | | | experience investors, to replace low performing |
| be constituted of low profit low risk investments | | | | investments with high performing ones. But |
| such as fixed income securities, money market | | | | remember, active management often requires |
| funds, cash, and/or precious metals like gold to | | | | greater costs. |
| limit overall portfolio risk. The exact portfolio | | | | The advantages of capital growth investment |
| capital allocation depends on many things like | | | | strategy involve faster increase in asset value and |
| individual profit goals, risk tolerance, risk capital | | | | better chance of profit than most other |
| involved, portfolio size and investing experience. | | | | investment strategies. The disadvantages include |
| Many times one can see capital growth portfolios | | | | higher risk, unpredictable returns and high volatile |
| which allocate more than 90 percent capital to | | | | portfolio. With capital growth strategy, market |
| equities. Capital growth investors often prefer | | | | entry and exit timings are very important; and |
| small and mid cap stocks over large cap stocks, | | | | there are too many market, risk and economical |
| because these show greater growth and are | | | | factors to be considered. The silver lining is |
| expected to offer increased return over time. | | | | 'irrespective of frequent ups and downs, the |
| Diversification of portfolio is important in capital | | | | equity market shows almost steady growth in |
| growth strategy and is achieved by investing in | | | | long-term; which is higher than most other financial |
| different products like stocks, options, futures, | | | | markets'. |
| ETFs, funds, bonds, etc. Portfolios which allocate | | | | |