From this article you will learn:
- What is an investment strategy and why is it necessary?
- Personal participation in investing
- Passive and active investing
- Stock Market Investment Strategies
- Cryptocurrency investment strategy
- Currency investment strategy
- Donald Trump's investment strategy
- Conclusion
What is an investment strategy and why is it necessary?
An investment strategy is a certain sequence of actions by the investor, an algorithm developed by himself or borrowed ready-made for carrying out investment activities. At the moment, there are quite a lot of such strategies, some of them have existed for decades and even centuries.
They differ from each other mainly in the following parameters:
- Volume of investments . In some places you can start investing from 1000 rubles, while others will require an amount of 3 million or more.
- Risks . There are options without risk at all, and there are those in which the probability of success is estimated at several percent.
- Profitability . Usually inextricably linked with the previous point, since there are no highly profitable strategies that do not involve serious risks.
- Investor involvement in the process . You can spend several hours every day, or you can perform a couple of actions a year.
- Investor qualifications and financial literacy . Even a grandmother at the age of 90 can open a deposit in a bank, but only a person who is fairly well versed in the matter can create a good cryptocurrency portfolio.
From this list, the variety becomes clear, because you can combine them in different ways. It is also obvious that the division of investment strategies into categories is very arbitrary, since an infinite number of such classifications can be made - short-term risk-free, long-term and high-yield, independent low-risk long-term, and so on . We will consider them sequentially according to one of the main points, giving an idea of how you can approach the investment process.
Bonds
Debt securities have always been a good alternative to a deposit. Now on the stock exchange you can collect a reliable pool of OFZ (federal loan bonds) and municipal securities. “OFZ” are government bonds; now their yield is at the level of 5% per annum. If you don’t want to lend to the Ministry of Finance, take municipal papers.
The most profitable receipts are bonds of the Moscow region, Krasnodar region and St. Petersburg. You can lend to states from the Customs Union; now there are bonds of Belarus and Kazakhstan on the stock exchange.
From bonds you can receive coupon income, a fixed amount + earn from the growth in the yield of the debt instrument. Bonds are a good alternative to a bank deposit, and if you carefully take into account all the nuances, you can add profit to your investments.
Personal participation in investing
Perhaps, in any classification we should start from this point. The amount of money does not play any role here (with rare exceptions), only the participation of the investor himself is important. Accordingly, we have two options:
- Independent investing. As the name suggests, the investor makes all the decisions himself. This includes determining the amount, direction for investment, assessing risks and potential profits. You need to understand that some types of investments will require knowledge in the financial field, so you should only take on those options that are familiar or about which you at least have a general idea. Most of the strategies discussed below relate specifically to independent management. On the one hand, lack of self-confidence can lead to bad results, on the other hand, it is not at all a fact that it will be possible to find a worthy manager whose qualifications will be higher.
- Trust management (). This is the transfer of management to a special management company or, if considered in the context of the Forex market, investments in special PAMM accounts managed by a trader. The investor is not involved in transactions, he simply monitors the state of the investment. As a rule, they invest in several different industries at once, that is, they create a portfolio. Using the example of the most popular direction - the stock market, we can outline the management companies that each broker usually has. There is a whole staff of analysts assessing prospects and opportunities. To contact such a company, you just need to leave a request on the website or call the hotline. The main advantage is that these are official organizations with the appropriate licenses, for example, Sberbank or Tinkoff Investments.
Management company from Tinkoff Investments
Having answered the question for yourself whether you are ready to waste time and nerves, you can make a decision. If this is trust management, then we begin to look for a company. If this is still an independent investment, then we look at the various options below .
Passive and active investing
So, if you decide to engage in independent investing, then you should next determine what type of investment is interesting and preferable - passive or active. Let's consider financial investment strategies in this vein:
- Passive investing. This strategy is as follows - we collect different types of assets that require one-time actions with little subsequent control. The most common tactic is renting out real estate. Every month income is generated and under some circumstances taxes can be avoided. As a modernization of the real estate investment strategy, they use a mortgage - they make a down payment and then pay the amount from the money that the rental of the premises brings. After payment, we already have 2 real estate properties, we can repeat the mortgage option with one more. And this can continue for a very long time, with each new property speeding up the process of paying off the mortgage.
The second option for passive investment is various financial investments . For example, a deposit in a bank. It brings a small but very stable income and does not require time or attention. You can take the income, or you can leave it, gradually increasing the amount of money; accordingly, the income itself will increase. Another popular type of passive investment is government bonds. There are no strategies for investing in bonds; we simply choose the one that is suitable in terms of repayment terms and payment schedule. Reliable, payments are provided taking into account inflation (a separate type of OFZ - income is the inflation rate, to which 2.5% is added). Just like with a deposit – you invest once and easily receive money.
Deposit rates in dollars, amount $1000 - Active investing. It implies the direct participation of the investor in the process. Unlike passive ones, such strategies require more income, but at the same time you will have to constantly monitor the situation, study a lot of information and be aware of what is happening in the world.
From everything that has been said previously, it turns out that if independent investment is chosen and it is not passive, then we move on to active investment strategies, which are quite diverse, numerous and almost everyone will find “their own” option.
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Example of a conservative portfolio
A conservative portfolio should include a large share of protective instruments (gold, bonds) and a smaller share of riskier assets. An approximate distribution of asset types by risk is presented below.
Below is a broadly diversified portfolio. It consists of 60% protective low-risk assets:
- Global bond market – 35%
- Developing countries bond market – 10%
- Gold – 15%
40% of the portfolio consists of moderately risky securities:
- Global stock market – 15%
- Shares of developed countries – 15%
- Real estate – 10%.
In practice, such a portfolio can be implemented using a line of mutual funds or ETFs, distributing shares between the funds in the appropriate ratio. On average, such a portfolio can show a return of 3% to 5% per annum in foreign currency, which solves the problem of preserving capital and protecting against inflation.
Stock Market Investment Strategies
The stock market opens up enormous opportunities for investors. We have already talked about bonds, so we will consider everything related to stocks - this is the most popular trading instrument. To work with them, you will need a brokerage account; registering it will take very little time (for long-term investing, it is better to immediately create an IIS, this will save on taxes). After this, you can start trading.
The main investment strategies are as follows:
1. Strategy for investing in company shares . The fact is that corporations usually do very well during general economic growth, the price of securities gradually increases, and periods of recession are considered as an opportunity to buy shares cheaper. Therefore, we are simply gathering a common position little by little. A good example is Gazprom, which has recently shown excellent growth. And before him there was Sberbank. These are well-known brands, so buying their shares is always justified. But you need to follow the news background, that is, information relating to the company. On a negative background we sell, on a positive background we buy and hold. If a stock goes into negative territory, then you will have to wait, after a while it will return to positive (we are talking only about top stocks - “blue chips”).
The dividend strategy deserves special mention . The previous option implies making money on changes in the price of a security, which to some extent can be called a speculative investment strategy in the stock market. But besides this, there is also the main purpose of the paper, namely, to receive part of the profit from the company’s activities. Dividends are paid in accordance with the results the company has shown; usually a good indicator of the value of a share is the following: dividend payments for the year amount to 5-6% of the stock quote . That is. If you pay 6 rubles per year per share, then its value will be around 100 rubles. Everything that is cheaper has the potential to grow, everything that is more expensive has the potential to fall.
The dividend strategy involves holding a position for a long time and receiving profits in the form of payments. However, this goes well with the first strategy: they received dividends and sold the paper.
2. Portfolio investment strategy in the stock market . It is impossible to know for sure what kind of paper will grow. It happens that everything is ready for growth, good indicators and a positive news background, but quotes are marking time. To avoid investing all your money in one stock, it is wise to use portfolio investing. The point is to buy different financial instruments.
For example, you can make the following portfolio: invest 30% in bonds, and divide the remaining 70% between 7 different stocks - Gazprom, Sberbank, MTS, Magnit, Megafon and so on. If a crisis does not begin, then there are no prerequisites for all of them to remain in place or even fall. Registration in one click. One click of the “Registration” button and then you go to the official Pegas21 website; all you have to do is select your favorite game from the list and what currency to play with. You can now make a deposit in cryptocurrency (Bitcoin) or (Ether). And you can also withdraw your output to Bitcoin. Upon registration, each player receives a real 800 ruble bonus. Typically, a portfolio investment strategy involves a significant share of protective assets, which we will discuss later.
3. Conservative investment strategy . It is popular among those who primarily value stability. This type of investment may not bring income, but with all this, it does not even mean that the investment capital may suffer greatly. A conservative investment strategy involves investing in the following assets:
- currency basket , where the main part is occupied by the Swiss franc, the Japanese yen and slightly less the US dollar;
- precious metals , which, by the way, are generally prone to strong growth in any period of instability;
- bonds mentioned earlier.
It is from these assets that a conservative portfolio is compiled, which differs from the previously mentioned only in the share of protective assets. The higher it is, the more reliable the investment will be, but you need to understand that the profit will be minimal.
4. Long-term investment strategy . The only difference is the timing. If we usually look at daily charts and estimate the potential for movement of a security or currency at a maximum of 10-15%, then in a long-term investment strategy we are talking about weekly and even monthly charts. For example, Lukoil was in a small range for a very long time, and then in a couple of years it showed growth of more than 100%. Those who waited patiently received dividends all this time and eventually saw the paper double. And who takes a very long time - tripling. This strategy goes well with portfolio investing. We sell what has grown and invest it in other instruments. And what doesn’t grow, we simply hold and receive dividends.
5. Aggressive investment strategy . Strictly speaking, it, like the conservative strategy, is applicable not only in the stock market. The bottom line is this: we use the maximum available funds to obtain maximum profits . Let's say we saw that the shares sank due to the news. This is an excellent opportunity for short-term investment, and leverage can also be used here.
A recent example is Yandex shares. Due to negative information (the possible adoption of a bill that is completely unprofitable for Yandex), the shares collapsed. And then they recovered when it became clear that nothing like that would happen in the near future. The main advantage of the strategy is quick earnings. Fast relative to other types, of course. The main disadvantage is the need to understand the topic, follow the news and spend a lot of time in front of the monitor.
As you can see, all strategies are to some extent reminiscent of a mosaic from which anything can be put together, the strategies combine perfectly with each other, you can take the principle of one and implement it in the context of another, or combine two within the framework of work on the third.
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Stock
The most realistic and risky way to make money for a conservative investor. And here, if you follow the recommendations, you can increase your capital. Buy blue chip stocks. These are companies with the largest capitalization, which are included in the top short list of the Moscow Exchange.
“Blue chips” on the Moscow Exchange:
- Sberbank;
- Gazprom;
- Lukoil;
- Nornickel;
- MTS;
- Rosneft;
- Novatek;
- Pole;
- RusHydro;
- VTB;
- Alrosa;
- Aeroflot.
And this is not a complete list. Buy shares of these companies in equal shares and reinvest the dividends. Maintain diversification and don’t “put your eggs in one basket.” For example: If you bought Yandex shares in 2022, you would now receive a return on these securities of 250% per annum.
The risks of investing in blue chip stocks can be reduced by buying different companies and rebalancing your portfolio.
Stock
Currency investment strategy
Keeping money in rubles is like sitting on a keg of gunpowder . Over the past 5 years there have been two very strong movements on which you could make good money.
The strategy is extremely simple - we buy dollars and euros at levels of 63-65 rubles per dollar and 69-72 rubles per euro. The proportion is approximately half. When the ruble weakens, say, to 68 rubles per dollar and 76 rubles per euro, we sell half of the currency. We keep the rest to more serious levels. It is important not to be afraid to sell currency on time!
The fact is that the Russian economy is very stable, there will be no dollars at 200 or even 300, as “analysts” at RBC and BusinessFM like to talk about. But speculative movements in the area of 80-100 rubles per dollar can occur. Therefore, if this happens, we safely sell the currency and wait for the exchange rate to decline in order to buy it again later. The cycle can be repeated many times. Unfortunately, there are also no prerequisites for the ruble to strengthen to levels below 60 rubles per dollar.
Donald Trump's investment strategy
The name of the US President is used everywhere, attributing something to him. Which there is no trace of. Besides, today he says one thing, and tomorrow something completely different. Therefore, one can judge his investment strategy only by official transactions. And also according to the declarations that he submits. So, the basic principles are as follows:
- A significant part of the funds is invested in assets that will always and everywhere be of value . We are talking, of course, about real estate. Economic crisis or prosperity – real estate is always in price anyway. Plus, this is a great way to make passive income.
- In the stock market, it is worth investing in stable shares, in companies with large capitalization . We talked about this earlier, this is usually the TOP of the entire list of stocks on the market. You should make up a portfolio of them, at least 8-10 securities. If things are not going well somewhere, then other papers will bring in income. And again, don't forget about dividends.
- Whatever Trump does, he always immerses himself in the issue , studies everything carefully and acts extremely carefully. The more we know about the investment object, the better the result will be.
Risk insurance
To maximize the comfort of a conservative strategy, you can use the risk insurance function. This option will ensure full return of capital, even if the general market declines. This mechanism is implemented through special financial instruments - options and structured products that allow you to hedge risks.
Similar functionality is possible when choosing insurance investment programs, which are formed on the basis of an insurance policy. For example, you can consider savings programs for the S&P 500 index with full protection of invested funds and a minimum guaranteed income of 5% per annum. More details about the program here.
With a standard approach to the formation of a conservative strategy, risk insurance can be ensured through maximum portfolio diversification and constant monitoring of market trends. Based on fundamental analysis, it is recommended to rebalance assets from time to time.
It is important to understand! Diversification is the competent distribution of assets by shares, areas and types of financial instruments. Rebalancing is the sale of some assets (which are at risk) and replacing them with more liquid ones.
