3 Simple Steps to Create Your Investment Strategy
Your investment strategy does not have to be complex
You have done your research. You have looked at fundamental and technical indicators. You kind of understand the direction you want to go when it comes to investing, but you do not have a solid strategy you can execute. A strategy is a plan created to achieve a major aim. When it comes to investing, it is necessary to have a strategy. Having a strategy will allow you to avoid making certain mistakes. In this article the securities, tradeable assets, we will be focusing on are ETFs and stocks. The 3 simple steps for creating your investment strategy are to establish your focus, establish your goal, and establish your portfolio risk and optimization. With these steps, your path to long-term financial success will become much clearer.
1. Establish Your Focus
When it comes to investing, your focus can come down to value, growth, and/or momentum. Value investing involves picking securities that appear to be trading less than their intrinsic or book value. This means picking companies that are currently being underestimated and investing in them for the long-run. Fundamental analysis is key in value investing. An example of a value ETF is the Vanguard Value ETF. Examples of value stocks are Exxon Mobil and JPMorgan Chase.
