Investment Strategies Flashcards
(27 cards)
Active Management
An investment strategy in which an investor tracks the performance of their portfolio and manages the assets within it, on a frequent basis.
Asset Allocation
How investors divide their portfolios among different assets that might include equities, fixed-income assets, and cash and its equivalents.
Averaging Down/Buying the Dip
Buying more shares at a lower price than an investor previously paid. (Investopedia)
Buy and Hold
A passive investment strategy in which an investor buys stocks and holds them for a long period regardless of fluctuations in the market.
Contratian Investing
An investment strategy that is characterized by purchasing and selling in contrast to the prevailing sentiment of the time.
Couch Potato Method of Investing
A passive investment strategy that involves investing in a diversified portfolio of low-cost index funds or exchange-traded funds (ETFs) and holding them for the long term.
Cryptocurrency
A digital currency in which transactions are verified and records maintained by a decentralized system using cryptography, rather than by a centralized authority.
Day Trading
The buying and selling of a batch of securities within a day, or even within seconds, in an attempt to profit from small movements in the price of the security.
Diversification
The practice of spreading your investments around so that your exposure to any one type of asset is limited. This is done to reduce risk.
Dividend Investing
This strategy involves buying stocks in companies that pay regular dividends potentially providing investors with a source of regular income and long-term growth.
Dollar Cost Averaging
Investing the same amount of money in a target security at regular intervals over a certain period of time, regardless of price.
Environmental, Social and Governance (ESG) Investing
Investing based on corporate policies that encourage companies to act responsibly.
Event Driven Investing
A form of sustainable investing that considers environmental, social and governance factors to judge an investment’s financial returns and its overall impact.
Fundamental Analysis
Investing by examining economic and financial factors by attempting to determine a company’s Intrinsic Value. That is, finding the underlying value of a company.
GARP - Growth At a Reasonable Price
An equity investment strategy that seeks to combine tenets of both growth investing and value investing.
Growth Investing
An investment strategy focused on increasing an investor’s capital. Growth investors typically invest in growth stocks, which are young or small companies whose earnings are expected to increase at an above-average rate compared to their industry sector or the overall market.
Index-Based Investing
Investing in a portfolio of investments designed to mimic the composition and performance of a financial market index.
Momentum Investing
A strategy that aims to capitalize on the continuance of existing trends in the market.
Mutual Fund
An investment consisting of a portfolio of stocks, bonds or other securities, overseen by a professional money manager.
Passive Management
An investment strategy that maximizes returns by minimizing buying and selling. Index investing is a common passive investing strategy.
Penny Stocks
A common stock valued at less than one dollar, and therefore highly speculative.
Risk/Merger Arbitrage
An investment strategy where investors profit from the narrowing of a gap of the trading price of a target’s stock and the acquirer’s valuation of that stock in an intended takeover deal.
Scalping
A trading strategy where traders profit from minor price changes in a stock’s price.
Swing Trading
Profiting from short term movements in the stock price, using Technical Analysis.
