How To Choose The Right Value Investing Strategy

By on August 16, 2013

Sometimes investing isn’t always about the long-haul. Sometimes it’s about earning a profit in a short amount of time. Whether that’s done by buying low and selling high or bargain purchases, it is possible to see a healthy profit from investing. But, how do you choose the right value investing strategy?

Research Different Methods Carefully

There are five major strategies for investors interested in value. The first is known as general trading in which you watch, anticipate, and participate in trading based on historical averages. The second method is known as selective trading in which you select stocks that within a year’s time or less will perform better than the average stock. The third method is buying low and selling high. This is when you buy stock during a low period and then sell when the price rebounds. The fourth method is long-pull selection and is based on stocks that will fair better than the average stock over years and years of time. The final method is known as bargain purchases in which you purchase stocks that are selling well below their actual value.

Consider When You Want to See Value

Are you interested in seeing a quick return? Then bargain purchases and buying low and selling high may be the best methods for you. If you have more time to wait before you see the value, selective trading and long-pull selection are better options.

Combine Different Strategies for Different Results

If you want to vary your portfolio, consider a mixture of methods in which you see value now and later. This allows you to invest to boost your current income and to invest in your future. According to examples set by experts by Timothy Sykes, it’s always best to have stocks that will pay off in the long-term, but if you want to make a living through investing, you can do that as well.

Determine Your Comfort Level

Last, but not least, you need to determine whether or not you’re willing to gamble with your money. Truthfully, all investments are a gamble, but some have better odds than others. For example, buying low and selling high doesn’t always work. Sometimes companies are going down the drain and nothing can stop it. However, investing in long-pull stocks is a much safer investment.

Investing is done for many reasons. Most of the time people are looking for a way to build income for their future. However, you can invest in stocks in order to see a profit now. It’s something that professional investors do every day, but there is a big gamble, a gamble that not everyone is willing or prepared to take.

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