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Investment Strategy by Mind Map: Investment Strategy
5.0 stars - 3 reviews range from 0 to 5

Investment Strategy

In finance, an investment strategy is a set of rules, behaviors or procedures, designed to guide an investor's selection of an investment portfolio. Usually the strategy will be designed around the investor's risk-return tradeoff: some investors will prefer to maximize expected returns by investing in risky assets, others will prefer to minimize risk, but most will select a strategy somewhere in between. Passive strategies are often used to minimize transaction costs, and active strategies such as market timing are an attempt to maximize returns. One of the better-known investment strategies is buy and hold. Buy and hold is a long term investment strategy, based on the concept that in the long run equity markets give a good rate of return despite periods of volatility or decline. A purely passive variant of this strategy is indexing, where an investor buys a small proportion of all the shares in a market index such as the S&P 500, or more likely, in a mutual fund called an index...

approach

price based

use of prices, reactive only, forward looking/forecasting

type, technical, mechanical, statistical, factor models, PCA

fundamental

macro

industry (equities only)

company/instrument specific

type, factor models, PCA

risk classification

geography

region

country

asset class

FX, carry risk

commodities

equities, sector, company size, event specific

fixed income, government, corporate, sector, company size, event specfic, municipal, credit risk, term structure

real estate

private equity

hedge funds

cross-asset

volatility

long vol

short vol

vol neutral

liquidity risk

other

hedging demand

convergence

margin call risk

additional costs

taxes & government fees

spread

fees

tools

shorting

leverage

instrument based, futures, options

debt-based

market timing

non-linearity of return

event based

style

time frame

holding period of positions

time frames of candles used

position size

many small trades

big bets on a particular change

type

momentum

frequency

mean reversion

high frequency

low frequency

direction

with the trend

countertrend

non-directional

application

increase return

reduce risk

source

macro

value

growth/momentum

opportunistic

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