What is investment strategy?
It is an approach to investing tailored to the risk appetite, goals and specific interests of an individual investor. By following such a strategy, an investor can decide on the different types of assets that should be included in their investment portfolio.
Where have you heard about investment strategy?
You may see them mentioned if you're part of a defined contribution workplace pension scheme. These schemes invest your money in things like shares, and they often switch to a lower-risk investment strategy as you get closer to retirement.
What you need to know about investment strategy...
A range of factors can determine your personal investment strategy. These include your risk appetite and the returns you hope to achieve on your investments, as well as the assets, regions and sectors you're interested in. The amount of time you plan to invest for should also shape your strategy.
You'll also find that investment funds follow specific strategies. For example, they may choose to invest in assets that provide an income, or ones which are geared more towards growth. And while some funds passively track a particular market, others are actively-managed and hand-pick investments to try and achieve stronger returns.