Basic Approaches

Basic Approaches

Basic approaches:

• Value investing — buying cheap (undervalued) companies in expectation of growth
• Growth investing — buying growing companies with high prospects (more expensive, but grow faster)
• Income investing — focus on high dividends and coupons (passive income)
• Dividend investing — specifically searching for stocks with high and stable dividends
• Momentum investing — buying what is rising (the upward trend will continue)
• Contrarian investing — buying what is falling when everyone is selling (opposite opinion)
• Index investing / Passive investing — copying the index (for example, S&P 500) instead of picking stocks
• Active investing — active stock selection aiming to outperform the market
• Buy and hold — buy and hold for many years (do not trade)
• Dollar-cost averaging (DCA) — invest the same amount every month/quarter (reduces risk)
• Lump sum investing — invest everything at once instead of gradually