There are so many ways to pick stocks, the commonly known one will be growth investing, dividend investing, value investing, and technical analysis. In fact, they all works and able to make money in the market. Typically, whatever strategy the person picks have to suits their character and temperament.
For example, if the person is impatient and not able to wait to see his gain, he will not be suitable for value investing. Usually, for passive value investing, the waiting period is between 3 to 5 years. Unless, it’s active value investing, discover the catalyst, trigger it to realise the intrinsic value early. Technical analysis will be more suitable for investors who are looking for quick gain.
Growth strategy is focus on companies with strong growth potential with increasing revenue over the years and it will only be suitable for investors who are trying to seek capital appreciation.
As for, Dividend strategy is to focus on companies that pay good steady dividends. Investors will be more appropriate to invest in blue chip companies seeking for income and modest capital appreciation.
Value strategy is to focus on companies that display low valuations parameters and out of favour in the market. Investors will target the capital upside.
Initially, when I started investing, I am a value investor & from value strategy I did a switch over to dividend strategy. In fact, value investing works for me & over the years, I’m making good money out of it.
However, I did realise that there are some flaws in value investing. Until, I find out and understand how those real life multi-millionaires investors invest for their portfolio that actually trigger me to make the switch. In a nutshell, using the Dividend strategy actually allows me repeatedly to compound my money years after years. Yet, this investing strategy is so simple that anyone is able to follow & increase their wealth over the years.