Investors use different strategies to earn returns from their investments. An investor’s knowledge and experience in investing determines the strategies applied. The risk appetite, type of investment, and market dynamics also influence investors’ decisions on investment strategies. Some markets are easy to invest and apply different strategies to maximize returns.

For instance,investors in Singapore can explore several strategies because the business environment supports local and foreign investments. Some of the basic investment strategies are outlined below.
Passive investments
Passive

investing is based on the belief that financial markets are efficient. An investor who explores this strategy believes that he or she cannot outperform the market. The investor uses mutual and exchange-traded funds indices to choose the assets or instruments to buy. The investor will then wait for market forces to determine the returns. One benefit of this strategy is that it is cost-efficient. An investor may not have the expertise required for the active management of investments. Passive investing gives beginners a chance to learn active investment strategies while earning from their investments.
Buy and hold
Buying and holding is one type of passive investing. In most cases investors buy one type of asset, such as an equity that they believe will appreciate in the future. They do not trade further after the initial purchase. The strategy works in a rising market where prices of assets increase constantly. The investor will not earn significant returns in a slow market. Investors prefer this strategy because it is inexpensive and passive. Once an investor chooses the right market and assets, market forces determine the returns without the investor’s active management.
Market timing
This investment strategy involves observing the market trends and predicting the prices of assets. For instance, an investor can observe the prices of selected stocks on Singapore’s stock exchange. The investor will buy stocks when prices are low hoping to sell them when prices increase. Foreigners require an investment visa to buy and sell stocks in Singapore’s stock exchange. Market timing involves shifting assets or instruments between the market and cash. This strategy requires investment acumen and experience. Many traders lose their investments after making the wrong predictions. Sometimes unseen forces influence the prices of assets beyond the most accurate predictions. Market timing may work in the short term, but an investor cannot rely on the strategy to earn from long-term investments.
Portfolio immunization
Changes in interest rates influence the yield and value of an investor’s portfolio. Changes in portfolio value influence its ability to meet future liabilities. Portfolio immunization ensures that an investor earns a fixed income from a portfolio despite the possible changes in interest rates. Most investors use this strategy when investing in bonds or planning for their retirement. The yield on a portfolio is calculated in a way that the present value of returns is equivalent to the present value of future liabilities. The calculations depend on the length of the investment. Portfolio immunization requires investment expertise in estimating future liabilities and changes in interest rates. The strategy offers an investor a guarantee of returns from a portfolio. However, the assumptions applied when estimating possible changes in interest rates are imperfect.

Investing is committing part of your income to an endeavor with the goal of earning returns or a profit. In other words, investing is growing your money.

The conventional way of increasing your income is by getting a better job or working for more hours in your current job. However, getting a better job or promotion in your current job is limited to your qualifications and competence. This option is also dependent on the availability of better job opportunities. Investing is an alternative way of earning more money from what you already have. It is different from saving or gambling. Saving is simply putting a portion of your income away for future use. Your money may earn a certain percentage of interest, or not, depending on where you put your savings.
Gambling is taking a risk to put your money on a bet on a certain outcome. You will earn money if things turn out as you expected, or lose it all if things turn out differently. You do not need to do anything else to earn more. However, you have to do something to earn money through investing. For instance, you can buy stocks, bonds, or real estate. You can also start a business. These are different ways of investing your money, and people invest their income for different reasons. The most obvious reason is to grow their money. Investing enables you to earn passive income. This means that you do not need to quit your job to invest unless you start a business that requires your presence.
Investing is a way of meeting your long-term financial goals. For instance, if you intend to buy a house or your dream car in the next 5 to 10 years, then you can grow the money you have now to reach your goal. Some people invest to live a comfortable life in their retirement years, which is highly advisable. Investing is a viable retirement plan that will ensure you can meet your expenses and even live a better life when you retire from your job. People confuse gambling with investing because of the risk involved. Unlike a permanent job where you are guaranteed of a salary at the end of the month, investing involves taking a risk. You can either earn profit or make a loss in investments.

The idea behind

investing is to buy something at a low price and sell it at a higher price. For instance, you buy bonds, stocks, or goods at a low price and sell them at a higher price. The assumption when investing is that you will find willing buyers to buy your items at a premium. External factors affect the profitability of your investments. For example, political and economic changes influence the performance of stocks and currencies. Hence, you must take calculated risks before investing all your money into one idea. It is advisable to study the trends in the industry you intend to invest in before committing your money.
It is important to diversify your investments to minimize your risks. Do not put all your savings into one type of investment. You can start with one idea, then diversify to other investment plans. If you do not understand the trends in a certain industry, or you simply do not know where to begin, ask for help from financial advisors. Get all the information you can about an investment plan or idea to make a sound decision on where to invest.