Equities

Investment strategies

Determine an investment strategy of whether blue-chip, dividend or growth stocks suit you best.

Invest in what’s right for you

Selecting the right stock to invest in can be challenging for an individual investor. Therefore, establishing your investment goal, the amount of risk you are willing to take, and the time frame to remain invested can help to shortlist the stocks to invest in.

Generally, there are two broad investment goals:

  • Growth investing where investors go for companies with accelerating or a high level of sustained earnings growth
  • Value investing where investors go for companies whose stock is trading at less than their intrinsic value

Stock prices are subject to volatility, which are movements in the stock market on a daily basis. The higher the volatility, the higher the risk. As such, it is important to consider how much risk you are willing to take, how prepared you are to lose part or all of your capital, and whether you have the ability to make good any losses incurred.

Another key consideration is your Investment Horizon, which is the span of time to remain invested. This determines if you are seeking to capitalize on short-term price movements, or hold on for long term capital gains.

 Blue-chip stocksDividend stocksGrowth stocks

Investment goal

Stability
Relatively consistent in growth and more resistant to downturns

Steady income
Stable dividend payments and possibly capital appreciation gains

Capital appreciation
Stock value to possibly grow at an above-average rate as compared with peers or overall market

Risks

Along with stability may come relatively slower growth and lower returns

Dividend payments may not be made and interest rate fluctuations could affect dividend yield

Stock value may experience a fair amount of fluctuations

Investment horizon

Beyond a year due to their stability

Up to 12 months or more if seeking stable, recurring income

Up to 12 months

Trading strategy

Passive trading (buy-and-hold)

Active trading


Placing your first trade

STEP 1

Identify a list of stocks that you are interested in. Assess your investment goals and adopt technical and/or fundamental analysis to aid in your investment decisions.

STEP 2

Once you have decided on the stock(s), you can monitor their performances and prices with an appropriate trading strategy.

STEP 3

Buy your stocks and execute your trading strategy. Monitor and revise your stocks investment along the way and ensure it is in line with your investment goals and risk appetite.


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