INVESTMENT STRATEGIES

We have covered in the previous articles Risk Management and Stock Market Investment Psychology. In the following articles I will highlight different investment strategies used by successful investors.

THINKING GLOBALLY

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The investor in the stock market must think in the same way that an entrepreneur thinks. The entrepreneur will start the business in the local area and as the business becomes successful he will expand to other provinces and regions. Finally, with the help of new technologies such as the Internet, it will be able to expand worldwide to different countries.

In our investments we can do the same. We start by buying the best shares of different sectors of our own country, and over time as we can introduce more capital in the market, we must expand our investments, first to other countries that use our same currency and subsequently to countries from different continents and coins.

This is one of the main forms of diversification, and today it is very easy to invest in different countries and markets thanks to new technologies and the internet.

WHEN THE MARKET GOES DOWN

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In the years when the market is bearish, it is normal for our stop losses to jump. This is the time to collect benefits. We should not get sad because the stops jump. At that time our strategy will be to go on sale in stocks whose trend is bearish, with the aim of buying those shares at the lowest possible price.

In a bear market the professional investor will not panic. He will simply change the investment strategy. In this way he will always be winning whether the market trend is bullish or bearish.