An investment strategy is how you plan to invest your money for the long term. The best investing strategies will be built on your goals, risk tolerance and family obligations. Your preferred investment strategy will likely change as your life changes, and it may include different types of investments over time.

There are many different investment strategies, ranging from active trading to passive indexing. Active strategies, like momentum and event-driven investing, seek to beat the market by timing pricing, and can generate substantial returns. However, they can also result in big losses when markets shift rapidly. Read more theinvestorscentre.co.uk

Passive indexing strategies are focused on buying and holding investments for the long term, which minimizes transaction costs and taxes. Proponents of these strategies say they are less risky than trying to outperform the market by actively attempting to time price movements.

Investors can choose to focus on certain industries or geographic regions when selecting stocks or funds. Some people opt for developed market stock markets, which tend to be more stable, while others select emerging markets, whose growth can boost stock prices.

Inflation-Proof Investment Strategies for Protecting Your Money

Another way to reduce investment risk is by diversifying your portfolio across asset classes — that is, by investing in stocks, bonds and cash. This can help protect your returns if one asset class performs poorly, as well as cushion the impact of volatile markets. Typically, this is done by investing in a broad mix of mutual funds and ETFs.