Investing is not just about picking winners and losers, as it is often mischaracterized.
Those who truly build wealth from investing do so by putting together a strategy, first and foremost.
This strategy is going to be doing most of the decision-making when it comes to when to buy when to sell, and so on.
But how do you put together an investment strategy that works for you?
Consider your goals first and foremost
The idea of an investment strategy is predicated on the idea that there is something that you want to achieve via investing.
We all want to build wealth, that’s true, but if you’re more specific with your goals, you can also be more specific with your plans.
Sites like Investopedia can help you work out your specific goals, how much you want to gain, what you don’t want to lose.
From there, you can make sure that your decisions in investing are driven by an understanding of what you’re actually trying to achieve.
Know what makes you sell
Risk management is, without a doubt, one of the trickiest parts of creating an investment strategy.
Letting your feelings take the wheel over an asset’s potential is an easy way to lose big.
Sites like The Motley Fool can help you put together a loss reduction plan that lays out the specific criteria that would make you sell, such as companies losing major customers, the business heading in a different direction, the right of a significant competitor, and, of course, major movements of the stock prices.
You want to make sure you’re not overreacting to small movements in the prices, but you also need to know when it’s time to scale back.
Test out different approaches
Once you know your goals and the tools available to you, it’s time to give them a test drive to see how they work in the field.
Rather than trying out new strategies with your own money, there are tools like Tickblaze that can help with strategy design by allowing you to backtest various different strategies at once to see how their results vary.
These tools can be used across multiple markets, so you can see how your entire portfolio is balanced, allowing you to optimize your position weighting, risk management, and more.
Keep growing your information network
Nothing is more important to an investment strategy than ensuring you’re getting good information on potential investments.
Clearing the “fog of war” to see opportunities before others are going to help you find the positions to take before the market knows it.
The single best way to be more informed is to follow both business and investment publications and influencers, keeping your ear to the ground so that you get the hints of a company on the rise before everyone else.
There is no one “best investment strategy” that works for everyone.
You need to consider your goals, your portfolio as is, the different moves available to you, as well as where you get wind of new opportunities.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)