Question

In: Finance

If someone gave you $1,000 what stock investing strategy would you pursue in order to maximize...

If someone gave you $1,000 what stock investing strategy would you pursue in order to maximize your return on investment?

Solutions

Expert Solution

I will be trying to pursue value investment strategy.

Value investment strategies focus that buying out all the stocks which have a lower market price than their intrinsic value in the current market and it will be trying to look after the quality stocks and all those quality stocks which are trading below their normal intrinsic valuation are to be bought because value investor will believe that discrepancy between the intrinsic value and the current market price will be observed at some point of time.

I will be trying to utilise this money in buying out the undervalued stocks according to their intrinsic value and I will be trying to hold them for longer period of time in order to maximize my rate of return because at the current juncture, the market is excessively valued and all those shares which has been undervalued are most lucrative of all these because they will also be provided with a hedge against the risk of downside as they have been acquired at a discount to their intrinsic valuation.


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