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What Are Investment Strategies Made for Beginners?

Beginner investment strategies vary depending on your investment goals and risk tolerance.

Beginner investment strategies, explained

If you’ve put off investing for quite some time because you’re just not sure where to begin, you’re not alone. In fact, most Americans — especially millennials — admit that investing is “scary” and “intimidating,” according to research by Ally Invest. The “Someday Scaries” plague about 61 percent of adults who know that, someday, they’ll need to be more financially secure — they just don’t quite know how exactly to get there.

But, while top-performing tools and coveted resources were once reserved for the Wall Street elite, AI and Big Data are reimagining the industry for everyday retailer investors. No matter where you are in your investing journey — even if you’re a total newbie — you, too, can save the big bucks for your financial future. You just need an investment strategy that’s right for you.

With that said, here are four investment strategies to consider when you’re just starting out.

Value Investing

Value investors look for the most bang for their buck; they’re the bargain hunters of investors. They look for stocks trading at lower prices that they believe really should be much higher. When the market finally realizes the value in those stocks and ups the price, value investors will make a profit on every share they’d purchased since they called it first. Warren Buffet is a famous value investor who was able to sell stocks for much higher than he’d paid when the market corrected undervaluation.

Growth Investing

Growth investing is the practice of investing in assets that you believe have serious potential for increasing in price. It’s, therefore, common to find growth stocks in emerging industries like the technology and medical sectors. Growth stocks typically break down into two categories.

  • Short-Term Investments: These are held for less than a year. This is because investors believe a company will see rapid gains followed by a plateau.
  • Long-Term Investments: These are held for more than a year. This is because investors believe the company will increase steadily for years or even decades.

Momentum Investing

Momentum investing refers to seeking out data-driven patterns and discrepancies in a company’s finances. Momentum investors look for trends in a stocks price action, as well as clues for when the trends might change. This can help them predict when a poorly performing stock might start to recover, or when a stock that has been soaring might fall back to Earth.

Income Investing

Income investing focuses on buying securities that provide steady sources of revenue instead of putting money into equities that theoretically could increase in value. This strategy increases the cash-in value of your portfolio since income investing looks toward investments that provide immediate returns. Income investing can be divided into two broad categories:

  • Dividend Investing: This is when a company regularly pays investors a portion of its profits (dividends).
  • Bond Investing: Bonds are essentially loans you grant to institutions or governments in return for guaranteed interest and principal repayment. They pay out consistently.

What this means for you

Deciphering the best investment strategy can be difficult, of course. You need a good grasp on your risk tolerance, an idea of your investment goals, an understanding of your investment timeline, and a commitment to keeping abreast of market swings.

Q.ai can sort all of that for you, and then some. Our AI identifies and builds the most ideal portfolio, which we call an investing kit, for you based on key factors like your threshold for market volatility, your personal reasons for investing, and the time on your hands — and then it auto-adjusts your portfolio with inevitable market swings. Basically, you don’t have to lift a finger.

Disclosures

Q.ai is the trade name of Quantalytics Holdings, LLC. Q.ai, LLC is a wholly-owned subsidiary of Quantalytics Holdings, LLC ("Quantalytics"). Quantalytics offers automated financial advice tools through Quantalytics Investment Advisors, LLC ("QAI"), an SEC-registered investment advisor. QIA’s investment advisory services are ONLY available only to residents of the United States. Disclosures concerning QIA’s investment advisory services are available on its Form ADV filed with the SEC. The content in this newsletter is for informational purposes only and does not constitute a comprehensive description of Q.ai's investment advisory services.

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