Although not commonly used, using strategy when investing can really work to your advantage. More and more people are investing in tech stocks, and now many are targeting technology with the five common types of investment strategies. Below, are the three most commonly used options when investing in technology.
1. Value investing
Value investing is a strategy used in investing very often. Basically, value investing is when you know the true value of something and purchase it when you buy it on sale. That works on a daily basis, such as purchasing a television on sale, or mobile phone. If it regularly costs X amount of money, when on sale it will have decreased to about 80% of the original cost. It is the same value, but just at a lower price; therefore, when reselling, it can be sold for 90% or 80% of the price, so you will have either gained or not lost anything. That is for tangible items, though. On the other hand, if stocks are not devalued then they will not be “damaged”, such as tangible items like a phone or a television. Stocks, on the other hand, can increase and decrease in value depending on the time of purchasing or selling. So if purchased at a low point, and an increase in their value occurs, then there will be a huge benefit when selling. Insight provided by strategic tech investor can show how a tech trend will rise or fall depending on that value and when the best time to buy it will be.
2. Income investing
Income investing is another approach that many people use. You will find that people who do not have a regular income are those who most commonly use this type of investment. Income investing is basically investing in a company or a share that gives weekly, monthly, bi-yearly, or annually dividends (sum of money), monthly and annually being the typical strategies. Income investments are not that common with people who invest in tech stocks as there is an insufficiency of tech companies that provide regular dividends.
3. Growth investing
Growth investing is one of the riskiest types of investments. Those who invest in growing companies either already have a great sum of funds or have done sufficient research on the company in question. Growth investment is investing money in a growing company in the hopes that it will render funds in return if it becomes successful. Growth investments can truly be useful when a growing technology company has good statistics. Those types of investments could truly bring in lots of money later in the game.
There are two more types of investments, which are small-cap investments and socially responsible investing, though those are less common with tech companies. In general, it’s important to explore different strategies when investing to see what suits your situation best. There are different forms of investing and different strategies used within each one, and with time and research, you’ll be able to be a pro.