Why you should find an investment strategy you like and stick to it…
There are many different investment strategies out there. They all have their merits and they all have their disadvantages.
A lot about how an investment strategy performs comes down to what's happening in the markets.
So should you change your strategy to suit the market? Or are you better off sticking with your strategy?
Read on to find out…
The different types of investment strategy
One common investment strategy
is value investing. By following this strategy, you try to buy companies when they’re cheap.
Another common investment strategy is growth investing. This involves buying into companies that look set to return rapidly growing earnings.
Over the long-term, value investing has come out on top over growth investing. But there are times when value investing underperforms growth investing.
This may lead you to think that switching between strategies is a good way to make the most out of changing market conditions and will benefit your portfolio.
But in trying to do this, you’re trying to time the market. And research shows that few investors are good at this, Cris Sholto Heaton in Money Week
Those investors who appear to time the market successfully most likely have luck to thank for this rather than skill.
Are you tempted to change your investment strategy?
If you think that changing your investment strategy is worth a go, think again.
Studies show that over the long-term trying to pick the best investment strategy to match what’s going on in the market will lead you to lose money rather than make money.
It achieves the opposite goal of what you want.
Instead, you’re best to stick with your investment strategy over the long-term. Changing your investment strategy is likely to pull down your performance.
So there you have it. Why you should find an investment strategy you like and stick to it.
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