Stock Investing Strategies: What Is the Best for You?

Wall St. Nerd


Updated on

January 13, 2023


When you begin investing, it is crucial to remember that there is a wide variety of strategies that you can use to better your gains. Before you decide on a stock to buy, you should evaluate all the strategies available to you and determine the best strategy for you. No matter how much investing experience you have, there will be a strategy for you.


Invest in the Stocks That Interest You 

When you start investing, look around the stock market and look for stocks that catch your eye. If you notice that you are attracted to a particular marker, you should take the time to investigate the company and see whether it is a good fit for you or not. It would be best if you analyzed the companies that stand out to you and determined whether their financials are strong enough for you to invest in. By investing like this, you will make yourself do an in-depth analysis of the company and force yourself to find a company that both stands out to you and has good credentials. If you notice that the stocks you are choosing to invest in are not performing well, you should look at your picks and reevaluate the financial indicators that you are choosing your picks off.

Take Advantage of 401(k) Match Programs

Whenever you start your career path job, you must take advantage of investing programs that your employer will offer. Many companies will allow employees to invest part of their paycheck into an investment fund and will match the amount that they invest up to a certain percentage. For example, some companies will match anything an employee invests up to 3%, meaning that if you invest 3% of each paycheck, your employer will put the same amount of cash into your fund. When you use this strategy, you are essentially earning free money as you will be receiving a 3% bonus on each paycheck. Every company will offer a different matching percentage, so it is imperative that you take the time to ask your employer what percentage they will match on your 401(k). These programs are extremely beneficial for you to take part in, bringing you extra income and automatically starting your investments without needing to put any more effort into your finances.

Put Your Emotions Aside

Whenever you start investing, it is crucial that you put your emotions aside while making decisions. By doing this, you will help yourself to make smart financial decisions. Investing can be extremely hard when you use your emotions to decide what stocks to buy into. If you buy a stock simply because you like its potential, or you hope to see it grow, you will become attached to it. For example, when you find a company that you hope to see grow and succeed, you will be putting emotions on the line. When you do this, you will force yourself to become attached to your picks and hold on to stocks after they have dropped or passed the point where you should sell out. Investing with your heart will make you fail and cost you your investments. By investing through pure logic, you will ensure that you are not letting yourself become personally attached to your investments and entering shaky ground. (Read my article about: Behavioural Finance: How our psyche influences our investment behaviour…)

Make Small Investments

Anytime you decide to buy a stock, you should ensure that it doesn't take up more than 10% of your account total. If you do invest in a single stock with more than 10% of your total account, you will quickly become worked up about the performance of the stock and will become an emotional wreck. When you see that your stock is making small gains, you will become overly excited about its growth and want to pull out early, and vice versa when it falls. It is much more important for you to invest with a reasonably sized investment and make a reasonable return on your investment than to invest heavily into stock and become attached to its performance. When you become heavily invested in a stock's performance, you will quickly lose money.

Invest the Money You Would Spend

If you like to go out and spend money, you should consider cutting down on your frivolous spending habits and instead put that money into your investments. By doing this, you will help yourself to save money on extras that you don't need and help yourself to make money by investing it wisely. Everyone has spending habits that they can cut down on, so you should take the time to examine your habits and stop yourself from spending your cash on things you don't need. Whenever you run an analysis on your budget, you should determine the amount of cash that you want to stop spending every month and then proceed to invest that amount instead of spending it every month after that. While it may feel necessary to spend money at Starbucks every week, it isn't always truly necessary. Instead of spending USD 30 a week at Starbucks, you could invest that same USD 30 every week. This will immensely help you to expand your financial security to new heights, allowing you to stop worrying so much about your bills at the end of the month.

No. 1 - Stock Investing Strategies: Real Estate Investment Trusts (REITs)

Investing in a REIT can be one of the best decisions for your financial life. These funds are necessary parts of every investor's portfolio, giving you the opportunity to reap the benefits of owning real estate without needing to own hard assets. These funds are easy to buy into, allowing anyone to take advantage of the ever-expanding real estate market. Don't take a REIT for granted, as it will surely provide you with the returns you need to make bank. If you want to get into the real estate market but don't have the funds to get started, investing in REITs will give you the opportunity you need to take advantage of the growing market, allowing you to grow financially.

Do you want to learn more about REITs Investing? Here you will learn how it works!

No. 2 - Stock Investing Strategies: Growth Investing

Growth investing is an extremely popular investment strategy that is used by millions of people across the country. Whenever you decide to start investing, you should take a look into the strategy and see whether it will work for you. This strategy is widely used, meaning that it has been proven to work for investors around the world. When you invest based on growth, you will look for companies that have a history of growing large amounts over its history. For example, Apple stock is a classic growth stock. These stocks will often offer small dividends if they offer any and will instead promise hyper-fast growth that will quickly make up for its lack of dividends. This is a great strategy for young investors who don't have large portfolios yet. By investing in growth stocks, you will give yourself the opportunity to quickly expand your portfolio, giving you new opportunities for you to invest with more capital. New investors will usually have small starting portfolios, meaning that you will need to make up for your lack of cash with a solid investment that will quickly outperform the market. Using a growth strategy, you will be able to grow your account to a size that will allow you to settle down and use a more stable and sturdy strategy that will consistently perform over several decades.

No. 3 - Stock Investing Strategies: Value Investing

Whenever you use value investing, you are attempting to take advantage of undervalued stocks that will likely see a rise in value over the course of the next few months. These stocks will have typically seen bad news or financial reports that have recently dropped their valuation. When you find a stock that typically performs well but has recently dropped, there is a chance that it will return to its previous value, which is where value investing comes in. Value investing involves buying the dip, so you will need to actively watch the market and wait for opportunities to present themselves in the market. If you want to take advantage of value investing, you should ensure that you are constantly scanning the news, waiting for bad reports to emerge in different sectors, and finance report season to buy stocks that report bad earnings. Never miss an opportunity to grow your finances and buy the dip with value investing today. There are constantly opportunities opening themselves up in the market, so make sure to take advantage of them as soon as you see them.

No. 4 - Stock Investing Strategies: Dividend Investing

Dividend investing will allow you to take a long-term approach to your investments. If you like the idea of being able to simply invest and walk away from your stock, then you should consider starting to invest in dividend stocks. These stocks will slowly pay out small sums of money for every share of the stock that you own, allowing you to increase your stake in the company without needing to invest new capital into the stock. When you begin investing in dividend stocks, you will need to invest in the stocks you choose consistently, growing your position and significantly increasing the amount that you are making from your dividends. When you take a dividend investing approach to stocks, you are supposed to simply invest and forget. By doing this, you will allow your position to grow and mature without much input, allowing you to focus on more important things in your life. If you have a small portfolio, it may be hard to start investing in dividends, as you will see that the amount you make off of each dividend will not grow your account enough to make a noticeable difference year to year. As you grow your portfolio and increase your investments, you will quickly see the difference in your account before and after dividends are paid out, giving you significant spending money after each payout. The end goal of dividend investing is for your dividend payouts to be enough for you to live on year to year, allowing you to stop worrying about making an income. Once you reach this point, you will be able to retire comfortably, allowing yourself to settle down and live without worrying about an income whatsoever. 

Do you want to learn more about Dividend Investing? Here you will learn how it works!

No. 5 - Stock Investing Strategies: Options Investing

Whenever you decide to invest in stock options, you will allow yourself to take advantage of huge growth opportunities. This growth strategy will quickly grow your account when used correctly, promising huge gains on your investments. Options investing is usually regarded as a riskier form of investment, being a common investment when trading on margin. These investments are usually short-term, with a short few week to few month-long turnover times. The majority of largely traded companies will have the availability to be traded with options, giving investors the chance to truly put their money where their mouth is and reap the gains of large wins. Options trading can be extremely complex, requiring years of hard work and dedication to consistently get right over time. If you are going to attempt using options trading to grow your investments, you will need to do in-depth research into the market space and truly learn the ways that the options market works. Oftentimes, the options market will operate independently of the overall market, moving in odd ways that can throw beginning investors off guard. Make sure that you are well prepared to enter into the options market when you take the leap and start investing in options calls and puts. This strategy is a great one but will certainly take time to learn and perfect before you get it right consistently.

Did you know that Warren Buffett trades in stock options?Here you find my beginner guide to invest in stock options!  

No. 6 - Stock Investing Strategies: Penny Stock Investing

Penny stock investing strategies are usually seen as extremely dangerous, exposing investors to risk that they may not see in larger market cap stocks. If you plan on taking advantage of penny stocks, you will need to dedicate large amounts of time to planning your investments and searching for the best stocks to invest in. Penny stocks are known for having extreme volatility, exposing investors to unnecessary amounts of risk of having their investment quickly wiped out and lost to random fluctuations in the market. While most penny stocks will come crashing down, there will be occasional winners among the bunch, allowing investors to make massive gains off their investments. For example, if you find a stock worth 10 cents and buy several thousand shares of it, you can make massive amounts of profit if the stock begins to do well, as every penny gained will add hundreds to your portfolio. However, just as quickly as these stocks will rise, they will fall, ruining investors' hopes of making great profit. These stocks need to be watched with great caution, ensuring that they aren't moving to break your bank while you are invested in them. If you aren't okay with taking on huge risks, it may be better for you to stay away from these stocks, keeping your money invested in slower-moving and stable stocks.

No. 7 - Stock Investing Strategies: Momentum Investing

When you take part in momentum investing, you will be attempting to take advantage of a stock's hype and rapid growth to make a profit. When you invest based on momentum, you will usually be attempting to buy a stock that has recently received the great news that is pumping its price sky-high. Once the stock has made a great deal of growth, you will want to quickly sell the stock while its price is still high, keeping your gains as high as possible. This will give you the best chance possible at making a profit from your momentum investing strategy, as these "hype" stocks will quickly fall after making new highs and lose their value as quickly as they gained it. For example, when GameStop stock made new highs, investors scrambled to take advantage of its immense growth, but many were far too late to the party and lost out on their chance to buy the stock. Those who got in too late learned that the market will drop as fast as it rises the hard way as they watched their investments disappear when GameStop made its eventual return to its normal price. If you want to take advantage of momentum investing, it is crucial that you carefully watch your investment's size so that you can ensure that you are making the most of your investments and not allowing yourself to lose out on bad investments.

No. 8 - Stock Investing Strategies: The Buy and Hold

As Warren Buffett once said, the best amount of time to hold a stock is permanent. If you are truly confident in your investment's ability to grow long term, you won't need to ever sell it, as it will always be proving to make you money. Like with dividend investing, if you hate the idea of constantly needing to check your portfolio, you should consider the buy and hold strategy. When you use this strategy, you will attempt to find true winners and simply hold onto them for as long as possible. While you will still want to check in on your account from time to time, you won't need to actively manage your account like you would if you were using some of the other strategies on this list. While this strategy may not return the biggest gains over a short period of time, it will begin to add up as time goes on, allowing you to make great returns without needing to worry and actively manage your position. The buy and hold strategy is a true classic as investors have been taking advantage of this strategy since the creation of the market. It is extremely easy and simple to buy a single stock and forget about it, allowing it to grow and make gains over several decades without needing any sort of input from you to help it become a great investment.

No. 9 - Stock Investing Strategies: Core and Satellite Investing

While the name may seem odd, the core and satellite investing strategy encourage investors to build up a solid core of strong stocks that will promise gains over a long amount of time, with smaller satellite investments into market niches that interest you. For example, you can simply invest in index funds and large market cap stocks like Apple to make up the core of your investments, while you reach out into different sectors to invest with stocks with higher risk across the market. By keeping a large and stable core of stocks that you know will perform well, you will ensure that you will always have a stable anchor to fall back on during hard times, and your satellite investments will serve as opportunities to make larger gains while your core's growth slows down. This investment strategy will provide a healthy mix between stability and risk, allowing you to make the most out of your investment every day.


Whenever you begin investing in the stock market, it is crucial that you know what investment strategy will work best for you. You may decide to change your strategy from time to time or focus on one strategy over the entire course of your investing career. No matter what investing strategy you decide to use, you will run into a wide variety of opportunities that will work wonders for your strategy. It is important that you take the time necessary to truly learn what strategy will work best for you, learning the inner workings of each strategy that you attempt to use so that you can better invest. Every strategy that you choose will take time to master, but some will be much more complex than others. If you are new to investing, it may be beneficial to find a strategy that is simple for you to understand, even though it may not provide the best growth, while you search for a better-investing strategy for you to use. It is crucial that you understand the strategy you use to invest, or you will surely quickly lose money in the market. Take all the time you need to learn about your investing strategy and watch your investments flourish.

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Hi, I'm Alexander Kelm.

Serial entrepreneur, value investor and angel investor. Founder of Wall St. Nerd. Join me here on to learn how to read financial statements, find healthy companies, and invest your money wisely.

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