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.