The 4 investment strategies are as follows:
1) Value stock investing
Value stocks are for building your wealth. Fortunately, Tykr finds value stocks for us automatically as On Sale stocks are typically Value Stocks. With Tykr, you can find Value stocks that match and beat market returns.
2) Growth stock investing
Growth stocks are those stocks that continue to rise regardless of the Summary (On Sale, Watch, or Overpriced). In other words, even if the stock is Overpriced, it can still rise. This is because of the 4Ms (MOS, Meaning, Moat, and Management) which we will talk about in the next investing tip. A growth stock may not be as financially strong as a value stock but it can have a strong Meaning, Moat, and Management. Keep in mind, there are a lot fewer growth stocks in the market than value stocks but if you find the right growth stock, you can make great returns. Also keep in mind, that growth stock investing is riskier than value stock investing. Some investors confuse growth stocks with speculative stocks. We’ll touch on speculative stock investing below.
3) Speculative stock investing
Speculative stocks are the highest-risk stocks and this is where most investors lose money. Marijuana stocks, penny stocks, and IPOs are typically speculative stocks. These stocks are driven by emotions. A lot of people can fall into a FOMO (fear of missing out) trap of trying to get rich quickly but end up losing large sums of money. A great way to determine if a stock is speculative is to look within Tykr. A speculative stock typically has a low 4M score. Overpriced stocks are typically speculative stocks.
4) Dividend stock investing
Dividend stocks are for protecting your wealth, not building your wealth. Dividend stocks are stocks that pay a quarterly dividend for simply holding the stock. You can build wealth through dividend investing but it can take a long time. By using Tykr, value stock investing will build wealth significantly faster. It’s wise to move your money to dividends stocks if you are near financial independence or retirement. That way, to pay for your lifestyle, you don’t need to sell as many shares of stocks. You can simply pay yourself a dividend.
In summary:
- Value stock investing is for building your wealth.
- Growth stock investing can generate high returns but it comes with higher risk.
- Speculative stock investing should be avoided.
- Dividend stock investing is for protecting your wealth.
In the next investing tip we’ll help you understand the 4Ms.