Investment Strategies

There are a number of different strategies available for Stock Market Investment and we have categorised them in order of riskiness below.

Risk is alleviated through the purchase of quality companies. When one invests in the stock market it is vital to buy quality companies. Despite the fact that it may be a great company, we find that 85% of the time the stock trades sideways and moves between certain prices. The strategies that we would recommend, utilise this fact to allow regular cashflow to be generated.

We will teach you how to choose these quality companies and how to achieve the maximum rental returns from these shares using Technical Analysis.

Day Trading

This strategy involves buying and selling shares very frequently, maybe even multiple times in a day. This strategy aims to make money by predicting the short term movements of shares and predicting the strategies of the people who control the markets (or the market makers). This is a very risky strategy and should only be practiced by very experienced traders and they even get it wrong regularly. It is also very time consuming as one would need to be watching every single movement of a share for the complete duration of any trading session.

In order to make money on this strategy it is required to choose very volatile stocks (often the opposite of quality stocks) which have large % price changes over a trading session. If you choose the wrong trend this can have disastrous consequences and as such is very risky.

Roll Stocks

This strategy is similar in nature to Day Trading, however, the time frame is longer which makes the strategy a lot more controllable, less risky and a little less time intensive. Shares are traded on the basis of trying to buy when they have reached the lowest price and selling when they have reached a higher price. This cycle is repeated on a regular basis often about every 2 weeks. This would only be practiced on one or two shares and requires a very good knowledge of the share and its trading patterns.

This strategy requires that quality stocks are chosen. These stocks will be considerably less volatile than those used in day trading and their volatility will be extended over a time period considerably longer than 1 day.

Buy and Hold

This is the habitual trading strategy used by most investors who have limited knowledge of the markets. It relies on buying a share and leaving it to sit there and wait for the stock to appreciate in value and gain some cashflow from dividends.

This strategy requires that quality stocks are chosen. It is not very time intensive but can also lead to serious reductions in capital if the portfolio is not managed carefully.

Rent Shares (Recommended Strategy #1)

This is achieved through the effective use of financial instruments known as “call options” and can generate returns of between 3% and 5% per month.

The first step in the strategy is to purchase some quality shares. A ”call option” (the rent) is then sold on these shares and cash immediately comes into your account. Renting shares is effectively like owning a property and collecting a monthly rent on the property. It can take 20 years to get your property paid for in rent but you can get your investment in a share returned within 14 months!

BPR strategy (Buy Protect and Rent) (Recommended Strategy #2)

The safety of your capital is of fundamental importance in the investment strategies that we teach, as if capital is lost, then the ability to earn from the stock market is gone. The BPR strategy is for those who have slightly less tolerance of risk and are willing to invest in insuring the value of their portfolio.

As such we will teach you a strategy whereby you can hold a stock portfolio, insure it against falls in the market and at the same time achieve rental income from the portfolio on a monthly basis.

Through the application of this strategy it is possible to achieve compound returns of in excess of 2%-3% monthly. If this is done correctly, applying appropriate Technical Analysis, this has the ability to return 40% compounded in a year, while allowing you to have a fully protected portfolio.

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