How to choose the best etf investment for you (2)

Q7:What is growth investing?

As the name implies, growth stocks typically perform best in the mature stages of a market cycle when the economy is growing at a healthy pace. Growth strategies reflect what businesses, consumers and investors do simultaneously in a healthy economy - increasing expectations for future growth High and spend more money to do it. Again, technology companies are good examples. They are typically highly valued, but can continue to exceed those valuations when the environment is right.

Q8:What is growth and revenue?

Growth and income targets are a combination of two parts - one for growth and one for income. For example, growth stock mutual funds hold stocks of companies that are expected to grow at a faster rate relative to the overall stock market. Income funds seek to provide a source of income for investors through dividends. Income equity funds are similar to and often interchangeable with value funds, which invest primarily in companies that investors believe will grow at a rate consistent with income or other fundamental Stocks sold at low prices related to value indicators.

Q9: Value vs. Growth Index

The value vs. growth debate is as old as investing itself. Which is best, value or growth? When is the best time to invest in value stock mutual funds? When is the best time to invest in growth equity mutual funds? Is there a sensible way to balance value and growth in a mutual fund? What happens to the debate when we include index funds in the comparison?

Q10:What is buy and hold?

A style of investment in which buy-and-hold investors consider "market timing" to be more prudent than "time to market". This strategy is applied by buying investment securities and holding them for the long term, as investors believe that long-term returns are possible despite the short-term volatility characteristics. still reasonable. This strategy is opposed to absolute market timing, which typically allows investors to buy and sell over a shorter period of time with the goal of buying at low prices and trading at Sell at high prices.

Buy-and-hold investors will argue that holding trades for longer requires less frequent trading than other strategies. As a result, transaction costs are minimized, which will increase the overall net return of the portfolio.

Q11:What is fundamental analysis?

Fundamental analysis is an active investment strategy that involves analyzing financial statements to select quality stocks. The data in the financial statements is used to make comparisons with past and present data for a particular business or with other businesses in the industry. By analyzing the data, an investor can arrive at a reasonable valuation of a particular company's stock and determine if the stock is a good buy.

Q12:What is technical analysis?

Investors who use technical analysis often use charts to identify recent price patterns and current market trends in order to predict future Patterns and trends. In other words, there are certain patterns and trends that provide technical traders with certain clues or signals about future market movements, called Indicators.

For example, certain patterns are given descriptive names, "head and shoulders" or "cups and handles". As these patterns begin to take shape and are identified, technical traders can make investment decisions based on the desired outcome of the pattern. or trends.

Q13:What is Tactical Asset Allocation?

Tactical Asset Allocation is a combination of many of the previous styles mentioned here. It is an investment style in which the three main asset classes (stocks, bonds and cash) are actively balanced and adjusted by the investor with the aim of Maximizes portfolio returns and minimizes risk compared to an index. This style of investing differs from technical and fundamental analysis in that it focuses primarily on asset allocation and secondarily on investment selection.

There are good reasons for this big picture view, at least from the perspective of investors choosing tactical asset allocation, and something called modern portfolio theory, which basically shows that asset allocation has a greater impact on portfolio returns and market risk than individual investment choices.