Broker Check

Investment Strategies

Investment Strategies

There are many different investment strategies that an individual can choose.  The best strategy for you will be based on your suitability or risk, goals, and objectives.  This is a small example of just a few of the investment strategies available and each should be considered carefully before investing.

The two main strategy categories are active and passive management.  Many times, these strategies can cross into both categories or a strategy may employ a mix of both.

Active Management
Active strategies are closely monitored each day, week or month.  Often, these strategies involve frequent trading. There are several active strategies.  Listed below are just a couple of some of the most common:

Sector Rotation - There are 11 main super sectors, each falling into one of 3 categories, defensive, cyclical and sensitive.  There are many industries that fall within each sector.

Market Timing - along with several other factors, trends are closely analyzed.

Passive Management
Passive strategies are closely monitored but less frequently than active management.  Passive strategies involve less trading than active strategies.  There are several passive strategies.  Listed below are just a few of some of the most common:

Age-Based Strategy (Age – 100 = Debt to Equity Mix) Example: If you are 60 your asset allocation would be 60% Fixed Income and 40% Equity.  An investment example for the age-based strategy is Lifecycle funds.

Buy/Hold Strategy - You buy and hold for the long term.

Index Strategy - You trade or follow a market index.

Tax Savings Strategies - Tax free interest Municipals vs Corporates with higher yield?


Some considerations are carefully analyzed for both active and passive strategies.

Diversification – This is a well-known consideration when investing.  Putting all of your "eggs" in one basket is risky and so diversification is almost always an important consideration. Examples are:

Market Cap Exposure (Small vs Mid vs Large Cap)

Regional Exposure (Foreign vs Domestic)

Asset Class Allocation (Fixed Income vs Equity vs Cash)

Industry and Sector Exposure (Defensive vs Cyclical vs Sensitive)

Patterns - Patterns (or trends) show analysts how certain securities behave over a period of time.  Based upon the outcome of the pattern research and analysis, certain strategies may be employed.  A couple examples of the many patterns followed by financial analysts are head and shoulders patterns and continuation or triangle patterns.

Often, basic economics are also carefully considered when making investment decisions. Business Cycles are often used as a consideration


Contraction - The economy may start slowing down.

Trough - The economy may hit bottom, perhaps in a recession.

Expansion - The economy may start growing again.

Peak - The economy may be in a period of low inflation, leading to investor uncertainty.  It may lower risk premiums and might lead to more stock market returns.

Please Note: All strategies should be considered carefully, and no strategy is suitable until you know your risk, goals and objectives.  These methods are carefully considered when determining an effective strategy based on your investment profile.  Based on changes to your financial situation and investment profile, a strategy might also require adjustment.

Please contact Kim Doleman, Investment Advisor Representative, for more details.

*please see below for important disclosure