Welcome to the Investing Strategies section. Here you will find the some of the more common investing strategies. Each strategy has varying degrees risks involved and only you can gauge your own risk tolerance and how much you are willing to risk.
Checking off 2 main principles of investing:
1) Pay Yourself First!
2) TIME IN the market is always better than TIMING the market!
This is probably one of the easiest and less risky way of getting into the market and making it a regular part of your financial routine. This strategy is done by making smaller regular contributions weekly or bi-weekly or even monthly. Regardless of the direction of the of the market, the idea is to buy at discounts as prices go down, or buy in a well performing rising asset. As long as the basic fundamentals of the asset are sound, the value should continue to increase with time.
**Note that as DCA is a quick and easy way to get you started and build good investing habits. As your time in the market and investments grow, looking for more complex strategies can help your portfolio work even better.
Tools help you get start for this: WealthSimple and Crypto.com - both allow auto purchase or auto contribution.
Taking the main principle of DCA and combining it with a simple indicator to adjust your amount of the DCA. The idea is to have tiers or levels to your DCA and put in less money when an indicator(s) show strength (time for a correction) or put in more money when an indicator(s) show weakness (time for rebound).
Example 1: Take an indicator like a moving average, and at your set time to DCA if the price is below the moving average you DCA a larger amount and if the price is above the moving average you DCA a smaller amount.
Sample: Decide on an average you are willing to contribute to your investment (i.e. $50 every other Friday (Pay Day)). On your chosen day take a quick look at the price and if it is above a moving average (like the 9 day or 20 day moving average) you only put in half of your desired allocation ($25) but if on your chosen day the price is below the moving average then you allocate $75 towards the investment. This is tweak on the tried and true DCA investment strategy and combines it with the "Buy Low" principle.
Example 2: If you take the Greed and Fear index, at your set time to DCA if the there is more fear in the market, you DCA a larger amount and if the there is more greed in the market, you DCA a smaller amount.
This strategy involves finding investing vehicles for your portfolio that yield high dividends or interest and hold it, to allow it to compound overtime.
"Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it. " - Albert Einstein
Tools help you get start for this: Celsius and WealthSimple Trade - both allow to choose your Stock or Crypto of your choice to maximize and customize your Yield cumulation portfolio.
This strategy uses technical analysis of longer time frame charts (daily, weekly) to maximize the exposure to the upside of the price fluctuation and minimize the exposure to the downside fluctuations during price corrections. This sort of trading usually leads to holding the asset for days or weeks at a time.
Tools help you get start for this: WealthSimple Trade and any Crypto trading app like Newton or Shakepay along with a charting tool like TradingView for both Stocks and Crypto
This strategy is more common in Crypto, as it is easier to transact in smaller fragments of the asset, but can be done if your stock exchange allows fractional stock transactions (i.e. the buy and sell of less than 1 whole stock). The premise of this strategy is to stick with a "core" reference number and buy when your total goes below your core number to bring it back up to your core and sell when the total goes above your core number to shave the profits off the top. This strategy emphasizes investment principle of buying low and selling high.
This strategy uses technical analysis of shorter time frame charts (1min, 5min) to maximize the exposure to the upside of the price fluctuation and minimize the exposure to the downside fluctuations during price corrections. This usually leads to holding assets for minutes at a time, and closing all positions by the end of the day.
**Note - Canadian Robinhood equivalent is WealthSimple Trade.
**If you do decide to day trade it's best to find a better charting exchange that offers realtime charting, as most free charting has a delay. Questrade, TD Amritrade, Interactive Brokers are a few of the more advanced trading platforms better suited for Day Trading.