Some basic systems and principles
As a wise investor you should follow some basic systems and principles that any sensible investor should follow. It may seem obvious to many, but few people adhere to this “common sense.” A €smart investor€ is one who is aware not only of the complete composition of the his portfolio, but also of market trends. These factors enable the investor to make an informed decision-and an informed decision is 90% of the work towards successful investing.
There are several techniques used by investors while tracking mutual funds.
Momentum strategy
The method of the buying of stocks of companies whose earnings are rising.
Buy Undervalued - This is another strategy of buying the funds which are undervalued. This strategy “bets” that the prices of these funds are bound to rise, and with time, will do so.
Blue-chip funds - A traditional strategy of buying the mutual funds of blue-chip stocks.
Small-cap funds - Buy mutual funds of small companies. Diversification is very important for this strategy. Momemtum investors gain more than long term investors. A momentum investor is aware about the dynamics of the market and use the changing trends for entry and exits. A long term investor is least bothered about the market dynamics and follow a strategy of buy and hold.
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