{"id":428794,"date":"2022-01-06T16:09:10","date_gmt":"2022-01-06T16:09:10","guid":{"rendered":"https:\/\/www.finder.com\/uk\/?page_id=428794"},"modified":"2025-07-21T12:54:26","modified_gmt":"2025-07-21T11:54:26","slug":"strategy","status":"publish","type":"post","link":"https:\/\/www.finder.com\/uk\/share-trading\/share-trading-guides\/strategy","title":{"rendered":"Investment strategies"},"content":{"rendered":"

Interest rates on cash savings<\/a> can be a bit uninspiring, with some accounts offering a pitiful return on money held. In fact, when you take into account the effects of inflation, it\u2019s not hard for money held in cash savings accounts to fall in real value. Over the longer term, investing can offer the chance for better returns.<\/p>

It\u2019s best to have a clear investment strategy in place that aligns with your circumstances, goals, and attitude to risk. We explain more about investment strategies and how to choose the right one for you.<\/p>

What is an investment strategy?<\/h3>

Investment strategy is a fancy way of referring to a plan, or way of thinking, that shapes how you invest. The best strategy for you will depend on your personal circumstances, your attitude to risk and your goals. For example, the right investment strategy for a young person willing to take high risk in exchange for high growth might not be appropriate for a risk-averse investor later in life.<\/p>

Do I need an investment strategy?<\/h3>

One approach to investing is, of course, to simply pick individual stocks and shares on a whim. But this isn\u2019t terribly strategic and, sadly, basing your investment selections on gut feeling, or in an even more haphazard manner, is unlikely to reap rewards in the long term.<\/p>

Of course, even with the right strategy, investments carry risk<\/a>. The value of investments can go down as well as up. But choosing, and sticking to, a strategy that\u2019s based on clear guidelines, should help you ride out any short-term stock market volatility<\/a> and see you right in the long term.<\/p>

At the most basic level, you\u2019ll need to choose the type of investor you want to be. For example, do you want to be a \u201cbuy-and-hold\u201d investor<\/a>, where you seek out investments (shares or funds) that you think will perform well in the long-term, keeping your investments in place even in the face of short-term declines. This approach is reliant on you making solid choices upfront, but can result in decent returns for your investment over time.<\/p>

The alternative is to take a more active approach, where you trade frequently to capitalise on market fluctuations<\/a>. Or, of course, you can adopt a combination of the 2 approaches.<\/p>

Within these 2 approaches there are a number of potential strategies around the specific investments you choose.<\/p>

What are the different types of investment strategy?<\/h3>

Arguably, there are as many strategies as there are investors. Everyone\u2019s circumstances and goals will be slightly different. But most investment strategies will fall into one of a few main categories, including:<\/p>