Basics Of Investment Style
Each fund manager would have different criteria to choose their assets. Hence, if you wish to invest, the first thing you need to do is to check on the investment style of the manager in order to ensure that the style matches your risk appetite.
The style of investment is quite important as the return and risk are both connected to it. The current practice followed by fund managers to manage the portfolio is the blending of different styles for balancing risk and reward. Also, it helps with diversification. In case of cryptocurrency trading, the transactions are conducted through a various trading platform like Qprofit system. The trader could set his preference for trading and the criteria to be met for a trade to be initiated. Read this post here to understand more about it.
Below mentioned are few of the investment strategies that are followed by the fund managers.
Dividend investing- In this type of investing, the managers purchase those stocks that have a strong record in giving out dividends and earnings. As the stock market is volatile, most of the investors prefer to own a fund which offers them a consistent payout. Even if the share price goes down, the investor still would get some income. It is a great way to supplement the income when you are retired.
Fundamental analysis- In the case of fundamental analysis, it involves all the factors which have an effect on the performance of the investments that get evaluated. All the information related to the organizations like competitors, customers, clients, workers, suppliers, etc will come under scrutiny. You need to analyze the management thoroughly and understand the driving force of the organization. One should determine where the organization growth is happening from.
Technical analysis- It involves selecting the assets based on the earlier patterns of trading. The importance is given to the trend of the price of the investment. The technical analysis has the power to reflect all the relevant information just by checking out the price of the asset in a single moment.
However, a great manager would use the combination of the technical and fundamental analysis to plan his client’s investment portfolio. If the fundamentals of the stock are good, then the price should be on a rise. And if the price is not rising, then it shows that your analysis is gone wrong and you need to focus on a different asset.