There are various strategies used by investors to invest in shares. However, when investment strategies viewed based on Fundamental Analysis, there are three main categories of strategies for investing in stocks that can be chosen, namely Income Investing, Growth Investing, and the last is Value Investing. Additionally, if you also want to increase your knowledge about investment, we suggest you to see more at alphabetastock.com.
Income investing is an investment strategy that focuses on searching for “income stock”, which is shares of companies that routinely distribute profit-sharing in the form of dividends. This strategy is a strategy that aims to get regular income from shares while trying to minimize the risk of stock investment. If likened to football, in principle this strategy is like looking for top players who are experienced, have often entered goals, but unfortunately, it’s a bit old.
Growth Investing is an investment strategy that focuses on finding “growth stock”, which is a stock with high profit. This strategy focuses on buying stocks that have the potential to grow so that sometimes they don’t really care about valuation. Even high-priced stocks can be bought if they still signal future income growth. This strategy is believed to have a small risk because stock issuers have made profits and have grown.
The basis of this strategy is stock valuation. Investors only buy a stock if the stock is far below the fair price (undervalued) or is considered cheap. If likened to football, this strategy is like a talent scout who seeks to remote areas to find new players who are not yet skilled, can be paid cheaply, but have extraordinary natural talent. It is hoped that natural talent can become a star. This strategy seems to have a small risk because it looks for shares whose valuations are cheap, so it buys at lower prices. However, in general, blue-chip valuation is not cheap because it has been hunted by many investors, leaving only less attractive stocks like second or third-tier shares. It can be quite risky for new investors.