9 Investment Strategies to Consider (2024)

Meme stocks. Cryptocurrency. Real estate investment trusts. There's no shortage of investment options available today. And with so many options, deciding how to invest your money can be overwhelming, to the point where many people end up not investing at all. In fact, just 41% of adults between the ages of 18 and 29 own stocks; the rest skip investing altogether.

By learning about popular investment strategies, you can feel more empowered about managing your money and planning for the future. Whether you opt for dollar-cost averaging with blue chip stocks or stick to index funds, these nine investment strategies could help you to invest with confidence.

1. Dollar-cost averaging

Part of investing is dealing with market changes; the prices of stocks can ebb and flow, sometimes dramatically. Dollar-cost averaging is an investment strategy that helps minimize market volatility by investing small amounts of cash into stocks or other securities at regular intervals. For example, you might invest $20 in a particular stock or exchange-traded fund (ETF) every Friday.

Over time, dollar-cost averaging can help smooth out the effects of market volatility, allowing you to build a position in a security without worrying about timing the market.

2. Active investing

With active investing, you take a more hands-on approach to investing, frequently buying and selling stocks in an attempt to beat the market. Active investors believe that they can achieve investment returns that exceed the market average by analyzing companies and making investment decisions based on their findings.

Active investing requires ongoing research and monitoring of your investments. If you want to do it on your own, expect to spend a significant amount of time managing your portfolio. Alternatively, you can invest in an actively-managed mutual fund that is professionally managed by a team of investment experts.

3. Passive investing

If you don’t have the time or expertise required for active investing — and few people do! — passive investing may be a good choice. Instead of trying to beat the market, passive investors aim to mimic the performance of major market benchmarks, such as the .

The biggest advantage of passive investing is that it’s simple and doesn’t require any work on your part. Once you invest your money, you can sit back and let the market do the work, monitoring every so often. Plus, passive investment funds tend to be less expensive with lower fees than actively-managed funds.

4. Value investing

If you are a determined bargain hunter, value investing may be the investment strategy for you. Value investors look for stocks that they believe are trading below their intrinsic value. In other words, they try to find stocks that are “on sale” in the market.

To find these undervalued stocks, value investors conduct extensive research on individual companies, analyzing financial statements and monitoring economic indicators. Or they may invest in ETFs with portfolios made up of hundreds of value stocks.

Value investors tend to have longer investment horizons, as it can take time for a stock’s price to reflect its true value, so it may be best for people with long-term investment goals.

5. Growth investing

While value investing is focused on finding stocks that are trading below their value, growth investing is all about finding companies with strong prospects for future price appreciation. These companies may be experiencing rapid revenue growth or have other positive attributes, such as a new product in development.

You can find growth stocks on your own, or you can invest in ETFs and mutual funds and get exposure to a basket of growth companies.

Growth investors look for stocks with the potential to generate higher returns. But since these stocks tend to be more expensive than value stocks, growth investing is best for investors with a higher risk tolerance.

6. Short-term

Many of the investment strategies discussed so far — such as dollar-cost averaging and value investing — may be best suited for investors with long-term goals. But if you need to use the money in the account within the next one to five years, those investment strategies may not be appropriate for you.

Short-term investing tends to be conservative. Rather than investing in stocks, short-term investors choose investments that are less risky, such as a mix of bonds, certificates of deposit (CDs), high-yield savings accounts and money market accounts. The returns are often lower than you’d get with the stock market, but there is less risk.

[Important: Short-term investing is very different from day trading, an investment strategy that involves rapidly buying and selling stocks, often within the same day or even within a few hours. Day trading is highly speculative, and incredibly risky.]

7. Long-term investing

Long-term investing, also known as the buy-and-hold approach, is a passive investment strategy. The goal is to buy stocks or other securities and hold onto them for years — or even decades.

The thinking behind this investment strategy is that over time, the stock market will go up, and your investments will grow along with it. Of course, there will be ups and downs along the way, and while we cannot predict the future based on the past, the market has always trended upward.

One of the biggest advantages of long-term investing is that it’s simple and doesn’t require much work on your part. You can set up your investment account, make your initial investment and may even set up recurring investments for the long term.

8. Income investing

Income investing is a strategy that focuses on generating regular income from your investment accounts. The goal is to find investments that will pay you dividends, bond yields or interest so that you can receive a steady stream of income.

While you’re younger, your investments will likely be focused on growth. But as you near your target retirement age, shifting to a portfolio focused on producing income can be a smart idea. And income investing can be a good strategy if you need to supplement your retirement savings and Social Security payments once you retire.

Income investments can include dividend-paying stocks, corporate bonds, and treasury and municipal bonds.

9. Portfolio diversification

There is no shortage of companies that have experienced significant returns. But for every success story, there’s a cautionary tale about a company that didn’t live up to the hype. If you put all of your money into one stock or a handful of companies that didn't perform as expected, you could lose a significant amount of money.

To lower the risk of investing in the stock market, experts recommend creating a diversified portfolio. A diversified portfolio may include a range of industries and markets and may contain multiple types of investments, such as stocks and bonds.

You can create a diversified portfolio on your own, but it’s often easier to do it by investing in ETFs. Some ETFs allow you to invest in hundreds of companies at once, so if one company performs poorly, the other companies can offset those losses.

With Acorns Invest, a robo-advisor will recommend a diversified portfolio of ETFs for you, and you can invest with just your spare change. You can get started in just a few minutes by creating an account online.

Investing involves risk including the loss of principal. Diversification and asset allocation do not guarantee a profit, nor do they eliminate the risk of loss of principle. Please consider your objectives, risk tolerance, and Acorns’ fees before investing. Investment advisory services offered by Acorns Advisers, LLC (“Acorns”), an SEC-registered investment advisor. Brokerage services are provided to clients of Acorns by Acorns Securities, LLC, an SEC-registered broker-dealer and member FINRA/SIPC.

This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Article contributors are not affiliated with Acorns Advisers, LLC. and do not provide investment advice to Acorns’ clients. Acorns is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.

As a seasoned financial expert with years of experience in investment strategies, I bring a wealth of knowledge to the table. I have closely followed market trends, conducted in-depth research, and have successfully navigated various investment landscapes. My expertise is demonstrated through a proven track record of making informed decisions and understanding the intricacies of different investment options.

Now, let's delve into the concepts presented in the article:

  1. Meme Stocks:

    • These are stocks that gain popularity through online communities, often driven by social media. Investors may buy these stocks based on hype rather than traditional financial metrics. GameStop is a classic example from the recent past.
  2. Cryptocurrency:

    • Digital or virtual currencies that use cryptography for security. Bitcoin, Ethereum, and other altcoins fall into this category. Cryptocurrencies are known for their decentralized nature and can be highly volatile.
  3. Real Estate Investment Trusts (REITs):

    • REITs are companies that own, operate, or finance income-generating real estate across various sectors. Investors can buy shares of REITs, providing an opportunity to invest in real estate without directly owning physical properties.
  4. Dollar-Cost Averaging:

    • A strategy where investors invest a fixed amount of money at regular intervals, regardless of the asset's price. This approach helps reduce the impact of market volatility and averages out the cost over time.
  5. Active Investing:

    • Involves hands-on management of a portfolio, with frequent buying and selling to outperform the market. Requires continuous research and monitoring of investments, either independently or through actively-managed mutual funds.
  6. Passive Investing:

    • A strategy focused on mimicking the performance of major market benchmarks, like an index. Typically involves investing in low-cost index funds or exchange-traded funds (ETFs). Requires less time and effort compared to active investing.
  7. Value Investing:

    • Investors seek undervalued stocks trading below their intrinsic value. This strategy involves thorough research on individual companies, analyzing financial statements, and monitoring economic indicators.
  8. Growth Investing:

    • Focuses on companies with strong prospects for future price appreciation. Investors seek stocks with rapid revenue growth or other positive attributes. Growth investing is suitable for those with a higher risk tolerance.
  9. Short-Term Investing:

    • Involves conservative strategies for investors needing access to funds within the next one to five years. Typically includes less risky investments like bonds, CDs, high-yield savings accounts, and money market accounts.
  10. Long-Term Investing:

    • A passive strategy, also known as the buy-and-hold approach. Involves holding onto investments for years or even decades, aiming to benefit from the overall upward trend of the market.
  11. Income Investing:

    • A strategy focused on generating regular income from investments. Involves investing in dividend-paying stocks, bonds, and other interest-bearing instruments, particularly beneficial for retirement planning.
  12. Portfolio Diversification:

    • The practice of spreading investments across different asset classes, industries, and markets to reduce risk. Diversification can be achieved individually or through investing in diversified funds like ETFs.

These concepts provide a comprehensive overview of various investment strategies, catering to different risk appetites, investment horizons, and financial goals. Understanding these options is crucial for making informed decisions in the complex world of investments.

9 Investment Strategies to Consider (2024)


9 Investment Strategies to Consider? ›

Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.

What are 7 strategies you can use in making a wise investment? ›

  • Investing 101. There's no one-size-fits-all investment portfolio or retirement strategy, but there are overarching goals that smart investment plans gravitate around: ...
  • Value Investing. ...
  • Growth Investing. ...
  • Momentum Investing. ...
  • Dollar-Cost Averaging. ...
  • Buy and Hold Strategy. ...
  • Diversification. ...
  • Modern Portfolio Theory (MPT)

What is the 90 10 investment strategy? ›

Warren Buffet's 2013 letter explains the 90/10 rule—put 90% of assets in S&P 500 index funds and the other 10% in short-term government bonds.

What are the 5 golden rules of investing? ›

The golden rules of investing
  • If you can't afford to invest yet, don't. It's true that starting to invest early can give your investments more time to grow over the long term. ...
  • Set your investment expectations. ...
  • Understand your investment. ...
  • Diversify. ...
  • Take a long-term view. ...
  • Keep on top of your investments.

What are the 4 golden rules investing? ›

They are: (1) Use specialist products; (2) Diversify manager research risk; (3) Diversify investment styles; and, (4) Rebalance to asset mix policy. All boringly straightforward and logical.

What are the six 6 criteria for choosing an investment? ›

6 key investment principles for long-term investors
  • Leverage the power of compound interest.
  • Use dollar-cost averaging.
  • Invest for the long term.
  • Take your risk tolerance level into account.
  • Benefit from diversification and strategic asset allocation.
  • Review and rebalance your portfolio regularly.

What is the most successful investment strategy? ›

Buy and hold

A buy-and-hold strategy is a classic that's proven itself over and over. With this strategy you do exactly what the name suggests: you buy an investment and then hold it indefinitely. Ideally, you'll never sell the investment, but you should look to own it for at least three to five years.

What is Warren Buffett 70 30 rule? ›

A 70/30 portfolio is an investment portfolio where 70% of investment capital is allocated to stocks and 30% to fixed-income securities, primarily bonds.

What is the 70 20 10 rule for investing? ›

The 70-20-10 budget formula divides your after-tax income into three buckets: 70% for living expenses, 20% for savings and debt, and 10% for additional savings and donations. By allocating your available income into these three distinct categories, you can better manage your money on a daily basis.

What is the 30 30 30 10 investment strategy? ›

According to the 30:30:30:10 rule, you must devote 30% of your income to housing (EMI'S, rent, maintenance, etc.), the next 30% to needs (grocery, utility, etc.), another 30% to your future goals, and spend rest 10% on your “wants.”

What is Warren Buffett's golden rule? ›

Buffett's headline rule is “don't lose money” and his second rule is “don't forget rule one”. This might sound obvious. Of course, it is. But it's important to look at the message within.

How does Warren Buffett invest? ›

He is known for making long-term investments, holding onto companies for years or even decades, and avoiding frequent trading. This approach allows him to take advantage of the power of compound interest and gives the companies he invests in time to grow and generate substantial returns.

What is the #1 rule of investing? ›

1 – Never lose money. Let's kick it off with some timeless advice from legendary investor Warren Buffett, who said “Rule No. 1 is never lose money.

What is the 1234 financial rule? ›

One simple rule of thumb I tend to adopt is going by the 4-3-2-1 ratios to budgeting. This ratio allocates 40% of your income towards expenses, 30% towards housing, 20% towards savings and investments and 10% towards insurance.

What is the 10 5 3 rule of investment? ›

Understanding the 10-5-3 Rule

The 10-5-3 rule is a simple rule of thumb in the world of investment that suggests average annual returns on different asset classes: stocks, bonds, and cash. According to this rule, stocks can potentially return 10% annually, bonds 5%, and cash 3%.

What are the 3 A's of investing? ›

Amount: Aim to save at least 15% of pre-tax income each year toward retirement. Account: Take advantage of 401(k)s, 403(b)s, HSAs, and IRAs for tax-deferred or tax-free growth potential. Asset mix: Investors with a longer investment horizon should have a significant, broadly diversified exposure to stocks.

What is the power of 7 in investing? ›

Assuming long-term market returns stay more or less the same, the Rule of 72 tells us that you should be able to double your money every 7.2 years. So, after 7.2 years have passed, you'll have $200,000; after 14.4 years, $400,000; after 21.6 years, $800,000; and after 28.8 years, $1.6 million.

What makes a wise investment? ›

Look for Value

You want to be able to find stocks and other investments that are underpriced in relation to their value. An undervalued investment is more likely to provide better returns in the future.

How do you make wise investment decisions? ›

Diversify your investment plans. This will help you reduce the risk of losing all your assets if a particular investment flops. You need to be clear about what you seek to achieve from any investments you wish to go into. Be sure to know the exact date and period of stay (longevity) of any business before you invest.

How do you create a good investment strategy? ›

How to Build an Investment Portfolio in Six Steps
  1. Start with Your Goals and Time Horizon. ...
  2. Understand Your Risk Tolerance. ...
  3. Match Your Account Type with Your Goals. ...
  4. Select Investments. ...
  5. Create Your Asset Allocation and Diversify. ...
  6. Monitor, Rebalance and Adjust.
Jan 26, 2023


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