Education

Portfolio Strategy

A portfolio strategy refers to the overall approach and plan for managing a collection of investments, such as stocks, bonds, and real estate.

1) A Passive investing strategy is one in which the portfolio is designed to closely track the performance of a market index, such as the S&P 500, rather than trying to outperform it through individual stock picking or market timing. Passive investors generally have lower trading costs and may have better long-term performance.

2) An Active investing strategy, on the other hand, involves a more hands-on approach in which the investor or a portfolio manager actively selects individual stocks or bonds in an attempt to outperform the market. Active investors often have higher trading costs and may underperform the market in the long run.

3) Targeted investments strategy is when an investor focuses on specific sectors or companies that align with their values, for example, socially responsible investing, green investing, or industry-specific investing.