Investment Strategy
An investment strategy is a plan or approach designed to achieve specific financial goals by investing in a particular mix of asset classes, such as stocks, bonds, or real estate. Strategies vary based on an investor’s risk tolerance, time horizon, and financial objectives. Common investment strategies include value investing, growth investing, income investing, and diversification. A well-defined strategy helps investors manage risk and optimize returns over time.
Example
A young investor with a high risk tolerance adopts a growth investment strategy, focusing on high-growth stocks that offer potential for capital appreciation.
Key points
• A plan to achieve financial goals through a specific mix of asset classes.
• Tailored to the investor’s risk tolerance, time horizon, and objectives.
• Includes strategies like value investing, growth investing, and income investing.
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