Investments: where to invest and who to follow

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efore choosing companies and industries to invest in, deciding on an investment strategy is essential.

With changes in the market, stock declines, and crises, investors often panic, sell assets, and lost profits. With a system, investors react less to market declines and act on their planned plans.

It does not mean that without a strategy, an investor will not make a profit, but with a plan, they will achieve the goal. Of course, a system gives no guarantees, but it helps to control the whole process: how much and where to invest, which securities to buy, and which companies to analyze. A strategy works like a map in an unfamiliar city - you can do without it, but it is much easier with it.

When choosing a strategy, it is necessary to consider the goal, investment period, and acceptable level of risk. Investing is not easy; sometimes, it is better to turn to experts. For example, successfully deciding how to play on Bollywood website and creating or choosing different game tactics require practice and professionalism. No one succeeds without trying.

Investing for the long term in undervalued companies

An investor invests in companies whose shares are worth less than the actual value of their assets. It is why companies are called undervalued - they generate profits and have positive financial indicators and growth potential, but investors are not yet interested in them. This strategy is called value investing.

The strategy works because an investor invests in a successful business while the stock is still inexpensive. For example, Fitbit went public in mid-2015, and in early 2016 its earnings per share plummeted (because it directed part of its profits to research and development). As a result, beginning investors began selling shares en masse because they didn't believe in the company. But experienced investors saw: that Fitbit had excellent financial performance and a positive outlook for the future. They were right - already, in the next quarter, the company received more revenue of USD51 million than analysts' forecasts.

Investing in Stable Income

In this strategy, the investor receives dividends from the company- a share of profits distributed to shareholders. This strategy is called dividend investing - it is chosen by those who dislike taking risks. The investor no longer cares about share price appreciation or depreciation - it is more important that the company continuously distributes profits to pay dividends.

You can find out if the company pays dividends on its website - all JSCs and PJSCs report to investors and publish statistics on dividend payments. If a company maintains one amount of tips and constantly increases it, it is called a dividend aristocrat.

  • Advantages - Stable income
  • Disadvantages - the board of directors can cut dividends.
Dividend yields can be seen in a broker's app - search for the company and see if it pays shareholders.

Investing in growth companies

These companies are growing faster than others in the industry. As a result, they have good revenue and net profit margins and many active clients. Usually, growth companies become well-known brands - for example, Amazon, Netflix, Apple, Tesla, and PayPal.

New growth companies are hard to identify. You have to look for them in potentially promising industries - e.g., artificial intelligence, space, and Medtech. Even if you can find such companies, investing in them is risky. Usually, growth companies offer the market the latest development, and at the initial stage, it is unclear whether it will work.

  • Advantages - Fast and high returns.
  • Disadvantages - high risk, low or no dividends.

Where to find ideas for investment

Sometimes there is money, a goal, and a strategy, but not enough knowledge and time to follow the market or do not want to make a mistake. In that case, you can look at what analysts and financial institutions write, read about the market situation in telegram channels and professional communities, and see how big investors behave.

Portfolios of big investors. Large investors publish portfolios once a quarter. They are publicly available - type a query like Warren Buffett Portfolio into the search bar. In addition, the complete portfolio report can be found on the SEC website - type in the investor's name or management company.

The Bill & Melinda Gates Foundation Trust manages Bill Gates' portfolio. The portfolio includes financial, industry stocks, capital goods, real estate, and others. It is well diversified: risks are spread across different sectors and securities. About half of the portfolio is invested in the Berkshire Hathaway fund, which also offers diversified securities. This strategy suits those ready to invest long-term and who do not want to take risks. You can choose several companies from the portfolio or invest in all, but for a small amount.

The hedge fund Bridgewater manages Ray Dalio's portfolio. His portfolio is called an all-weather portfolio because it contains instruments that can generate returns in any economic period. It helps hold yields during crises and market corrections. For example, emerging market bonds and exchange-traded commodities rise during inflation, and inflation-protected bonds rise during a drop in demand. There are such securities in the United States. It is not necessary to repeat the portfolio completely - the main thing is to understand the principle and choose a few companies for each economic period.

The advantage of portfolios of large investors is that you can understand how and what they invest in and take a couple of ideas. In addition, large investors choose securities for the long term - even if you didn't have time to invest in a company at the time of minimum value, you could always do so while the stock grows.

Professional communities publish analytics, performance data, and reports - professional investors do that. They offer ready-made ideas and recommendations for companies: invest, sell, or wait. Understanding that not all communities share information is essential.

Examples of professional communities:

  • Seeking Alpha
  • Statista
  • FINVIZ.com.
For example, the Statista site has a collection of company charts, and below them is a link to the source - you can read the report in full. Likewise, FINVIZ publishes charts, metrics, and multiples for each company - you can find them by company name or ticker.

For example, Statista's website contains company charts, with a link to the source below - you can read the report in full. In addition, FINVIZ publishes charts, performance data, and multiples for each company - you can find them by company name or ticker.

The Seeking Alpha portal shares research on financial instruments, fundamental analysis, discussions, current news, and market data. The site offers investment ideas on companies, countries, and instruments: bonds, stocks, and funds. Concepts are broken down into long-term and short-term so that every beginning investor can find the right fit.

Recommendations of major financial institutions. Interesting investment ideas can be found on the websites of financial institutions. They mainly provide financial and banking services, but they also do analytics and provide forecasts on companies that the market relies on.

โœ”๏ธ Investments: where to invest and who to follow

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