What sort of investor are you?

Intermediate Difficulty · 5min to complete

Let’s work out what type of investor you are. A passive investor, an active one? Growth, Value or Quality?

What’s this tutorial about?

In this tutorial we discuss the differences between Growth, Value and Quality investment strategies.

Table of contents

In this presentation we are going to cover 5 topics:

  1. The different schools of investing
  2. Growth
  3. Value
  4. Growth
  5. What’s best for you?

Part 1. Different schools of investing

There are 2 main strategies that people can follow.

  • Actively managing your money yourself, with 3 sub-strategies
    • Growth investing
    • Value investing
    • Quality investing
  • Passive investing, hiring someone else to manage your money for you

List of brokers

Passive investing

Passive investing is almost an admission of defeat! You decide that you can’t beat the market yourself, so you decide to track the market.

Defeat is a strong word. Retreat may be better.

  • You are focused on reducing the fees you pay
  • Investing is too much of a headache or seems too complicated
  • You don’t wish to spend the time managing your money yourself

And despite this criticism, passive investing is entirely sensible and practical for many people. If you choose wisely, you can nearly match the returns of the market.

Which is better than most of the highly paid professional investors, who typically underperform, after they’ve pocketed their fees.

Part 2. Growth investing

What defines a growth strategy? Growth investors like:

  • Growth
  • Momentum
  • Buzz

Growth investors do not focus on:

  • Valuation
  • Dividends

Part 3. Value investing

What defines a value strategy? Value investors like:

  • Price
  • Cashflow / Asset Values
  • Ignored Companies

Value investors do not focus on:

  • Growth
  • Short-term / Buzz

Part 4. Quality investing

What defines a quality strategy? Quality investors like:

  • Industry Leaders
  • Stable Cashflows
  • Good Managers

Quality investors are willing to compromise on:

  • Growth
  • Value

Part 5. What is best for you?

Everyone has a different perspective and psychology. Our likes and flavours differ.

Though when asked, most people will say they are searching for quality stocks. It’s what we like to tell people.

However, most people lean towards being a Growth Investor or a Value Investor. It’s best not to kid yourself. The sooner you work out which you are, the better.

Just answer a simple question. Which do you want to do:

  1. Do you want to own hot stocks and ride the trends?
  2. Do you want to buy dollar bills for 80 cents? Knowing that it will require a waiting game.

1 is a growth investor. 2 is a value investor.

Conclusion

In this tutorial, we’ve given you a simple way to self-analyse your own investing strategy. Regardless of the school you follow, Stockflare is here to help you pick stocks. We help you search for growth, value and quality stocks.

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