IMPORTANT QUESTIONS IN INVESTMENT STRATEGIES

The questions that will narrow down your stock investment strategy search.

Before anyone can start looking at the different stock investment strategies that are available you should first know the answers to a couple simple questions.

1) How interested are you in becoming more active in stock investing?
If you are not interested in becoming more active in stock investing then a simpler, more hands off approach, would be recommended. One of the most simple and effective hands off methods of stock investing would be to invest in the S&P 500 Index and putting a set amount towards stock investing each month. On the other hand, if you want to actively manage your stock investing and pursue higher returns then there are many stock investment strategies that can be selected to best fit your interest level.

2) How much time do you have to manage your stock investments?
Certain stock investment strategies require more time than others. Good stock investment strategy shouldn't take more than a few hours per month to implement. If you subscribe to an stock investment service you can lower that time down because they do the most time consuming part of the process the up front research. You can find a good stock investment strategy that can accomplish your goals and within your time that you can devote to managing your stock investments is the key.

3) Are you investing for income or for growth in stock value?
In general, you can classify stocks as income stocks or growth stocks. Income stocks produce a dividend during a specific time period such as every quarter, which provides income on a consistent basis. Growth stocks might produce a dividend, but are mainly purchased for growth in stock price.

4) Are you going to invest in individual stocks or some type of fund?
Selecting individual stocks will take a more time than just selecting a mutual fund or an index, but your efforts can be rewarded with greater returns. When you purchase a mutual fund or an index you are purchasing a large baskets of stocks that have been pre-selected for you. It does make it easier to diversify, but there is a downside to this theory. There might be stocks that are going through a down period, which will reduce your overall return.

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