| There are two types of investment strategies in | | | | low, and sell when its value peaks, they are |
| common use include: | | | | relying on their ability to time the market. Very |
| Active strategies and passive strategies. In this | | | | few investors over the long haul are successful at |
| article, we will only discuss the active strategies | | | | making market predictions.c) Bond swapping |
| and leave the passive strategies for a new article. | | | | Since capital gain of bonds is linked to interest |
| Active strategies need regular decision about | | | | rate changes. Long-term bonds are very sensitive |
| what securities to invest in and how much to | | | | to interest rates. Investor attempts to guess |
| invest, as well as the timing of the sale of assets | | | | rising interest rate times to sell long term bond |
| and the reinvestment in new equities.a) Stock | | | | and buy short term bonds and to pursue the |
| selection | | | | opposite action when rate fall for capital gain.d) |
| The investor looks for stock that is undervalued, | | | | Ladder approach |
| since this offers the greatest opportunity for | | | | Investor purchase different investments that will |
| growth above the market averages by analyzing | | | | mature at difference time, so as to provide a |
| the publicly available information, looking for any | | | | fixed income with low risk. |
| indication that this stock is undervalued. This type | | | | I hope this information will help. If you need more |
| of investor will hold fewer companies in their | | | | information, you can read the complete series of |
| portfolio so they can stay better informed about | | | | the above subject at my home page: |
| each company’s situation, thereby providing | | | | All rights reserved. Any reproducing of this article |
| for better management.b) Market timinginvestor | | | | must have all the links intact. |
| attempts to purchase a stock when its value is | | | | |