Investing Strategies

Technical analysis (TA) as a standalone approach is a topic covered in great detail on a number of worthwhile sites. For us, TA will only be considered as an enhancement to our fundamental investing style – primarily as momentum. We will focus on investing strategies based on fundamental analysis.
Fundamental investing styles include growth investing, value investing, and dividend (income) investing.
However, there is no single best investment strategy. There is agreement that you should not have all your eggs in one “style” basket. This means you will need more than one strategy.
It is a question of emphasis in the form of allocation. The consensus is that the closer to retirement you are, the more conservative you should be in your style allocation. This means a larger focus on value and dividend investing.


This is not because value and dividend investing have superior returns, but because they have less risk. In other words, you are less likely to have a large swing in your capital when you are more likely to need it.


Many of the strategies used to illustrate stock screening have both a value and a growth component.
One of the most overlooked aspects of choosing a stock investment strategy is the historical performance of the strategy. Knowing what has happened in the past is no guarantee that it will continue. But it does provide parameters to assess the current performance of the strategy. The historical performance of a strategy is most often assessed by back-testing. When possible, the historical performance of a benchmark is based on the actual price history of the benchmark.
Investing is a process and, like any process, can only be improved by taking a systematic approach that is repeatable and measurable. This is the real basis for stock screening. A measurable, repeatable process allows the performance of a strategy to be evaluated and compared against both expected performance and benchmark performance..... to be continued