Best strategy for a 1 quarter-3 year holding period? Or 1-3 years?
I know that sounds like a wide margin of time, but what is the best strategy for me to use for investing if I'm holding my stocks for 3 years at the longest or 1 quarter or 2 quarters at the shortest?
Value, Growth, Technical analysis, etc.?
Where do you come up with these (seemingly) arbitrary time horizons? The answer is clearly not as simple as me telling you "Value." If I were you, I'd probably buy a few mutual funds and buy one growth focused and one value focused if you have the money to buy a few. You shouldn't really be in many/any single stocks if any if you have a set time horizon in sight (especially one that is short to medium term) and are asking questions like this. If you buy a mutual fund/index/whatever you would expect to at least capture most of the beta in the market. What if your "value" name is a value trap and keeps getting cheaper? What if your "growth" name sees it's growth rate slow to a trickle and the multiple compresses? Those are two ways you can get SMOKED in either strategy if you are just cherry picking stocks and have a "sell-date" in mind.
Oh. I thought there were specific strategies. Like how there's day trading, swing trading, etc. depending on the time period, or how value investing is meant for 5-10 year periods. Isn't there a type of strategy that works well for the time horizon i described?
OK I see what you are saying. I don't really think there's a good answer to your question. It's not like Value strategies only work over long time horizons and Growth strategies only work over short ones. Yes, it is true that to really see the performance of a value strategy, you should evaluate it over AT LEAST a full cycle, probably more, so 5-10 years+. But, that doesn't mean you can't employ a value mindset when buying for shorter time periods. Value really means different things to different people but to me it means fundamentally underpriced and with relatively protected downside. All I can say is don't daytrade or you will get your face ripped off by the pros. Your best bet is to invest, buy and hold, or like I said I'd look into some mutual funds or ETFs. For that time horizon (or any), if you insisit on picking single stocks why don't you pick a few high flying growth names and a few value names? You don't have to typecast yourself into one strategy.
yah im not much for trading. i was just wondering if there was a strategy of fundmental analysis that is geared towards returns over 1 or 2 years.
bump
I'm not sure what more you're looking for man. Why would fundamental analysis differ over different time horizons? A big part of fundamental analysis is to NOT time the market, playing the macro games, but instead to buy "what is" at present in situations where you think the market is undervaluing the company.
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