Comments on: Investment Strategies II – Active Investing

By: Canadian Finance

Canadian Finance — Sun, 17 May 2009 16:36:09 +0000

DGI, I too would lead towards dividend growth investing as more of a passive form of investing.

I think FT means it’s active in the way you analyze the stocks and are taking responsibility for your choices, as opposed to putting your money on an index fund.

By: Dividend Growth Investor

Dividend Growth Investor — Fri, 15 May 2009 07:07:38 +0000

Hmm I always considered dividend growth investing a “passive” strategy. You select 30+ stocks with solid fundamentals, wide moat business, rising earnings, cashflow and then rising dividends, and you wait and reinvest your dividends.
One think I wouldn’t do is buy dividend growth ETFs or Mutual Funds, whose portfolios are pretty slow to adjust for dividend cutters or eliminators.

Oh and I also consider myself a value investor, since I do not like to overpay for companies. I also enjoy a modest “growth” in my portfolio so that my companies can sell more products, make more money and ensure a stable rising dividend payment.

By: Canadian Finance

Canadian Finance — Thu, 14 May 2009 20:16:40 +0000

My goals for active investing are to pick Canadian, dividend paying stocks within a Smith Manouvre.

The second form of somewhat-active investing for me will be to pick the top 4 REITs and hold the within a TFSA.

By: Penny Pincher

Penny Pincher — Thu, 14 May 2009 15:39:58 +0000

posted in the wrong place…

By: Ms Save Money

Ms Save Money — Wed, 13 May 2009 21:18:22 +0000

I think it is hard to be “Active” on investing in stocks since it’s more for people who do a lot of short selling. Most common people are passive stock traders.

Thanks for the suggestion – one up on wall street. :) I’ll check it out sometime.

By: Rajeev Kumar Singh

Rajeev Kumar Singh — Wed, 13 May 2009 17:00:41 +0000

Very well written article explaing the various investment startegies.The best strategy in my opinion is the one that suits your investment horizon and goal. For someone like Warren Buffett, value investing is the way to go. He loves picking up stocks which have inherent value and are expected to do well consistently over a long period of time. His investment horizon is usually in decades and not in years.

By: Neil

Neil — Wed, 13 May 2009 12:37:33 +0000

The dividend stratgey is a good/more reliable option because you are targetting companies that are successful now rather than potentially successful in the future. These companies don’t need to be blue chips, just ones that generate healthy profits and dividends.

Of course the potential rewards are probably lower as well.

By: J.Chu | SuccessRevolution.com

J.Chu | SuccessRevolution.com — Wed, 13 May 2009 05:28:59 +0000

Hi FT,

I used to active at stock trading before the global crisis killing all my portfolio down.
Now, just wait for it to recover slowly.

For long term investment, we need to see the stock which be sold under it exactly value, and for play short-term, traders prefer to play the active stocks, and of course it is very high-risk.

For choosing the devidend-stock, mostly it makes correction on market after the devidend payment.

Investing in stock is good, but we must keep learning, and well educated about it, otherwise it’s like gambling.

By: cannon_fodder

cannon_fodder — Tue, 12 May 2009 21:38:01 +0000

If I value the growth of dividends, what strategy do I use? ;-)

By: WhereDoesAllMyMoneyGo.com

WhereDoesAllMyMoneyGo.com — Tue, 12 May 2009 21:16:31 +0000

@FT – an imperfect hedge, with cash-settled options, like index options, instead of ETF options or single stock options would do the trick.

By: FrugalTrader

FrugalTrader — Tue, 12 May 2009 17:01:49 +0000

Mark, what if an investor holds many individual securities? How would you suggest that they use options to protect their portfolio? Perhaps an equity collar on each position?

By: Patrick

Patrick — Tue, 12 May 2009 16:29:52 +0000

One mistake: value investors are not looking for stocks “selling for under market value”. They’re looking for stocks selling for less than their fair value — a much more nebulous and subjective concept.

By: Mark Wolfinger

Mark Wolfinger — Tue, 12 May 2009 16:02:28 +0000

Everybody has his/her own method for choosing investments, whether it’s mutual funds, ETFs, individual stocks etc.

But what is missing is any mention of the risk of being invested in the stock market while unhedged. I just don’t get it. Didn’t you learn a lesson during 2008? Why risk going through that again?

By sacrificing a portion of profit potential (and that sacrifice occurs ONLY when markets surge), the average investor can protect the value of his/her assets. Conservative option strategies reduce the risk of investing, yet PF bloggers ignore this aspect of investing (as do all financial planners and most stockbrokers).

Sure your discussion of passive vs. active investing is important – but once that decision has been made, those investments should be protected with options.

http://blog.mdwoptions.com/options_for_rookies/2009/04/trade-options-now-is-the-time.html

By: Nurseb911

Nurseb911 — Tue, 12 May 2009 15:10:15 +0000

I think value investing, growth investing and dividends can all be combined easily into a single strategy and I combine them together in my own activities. The pure investors of each discipline will argue against that claim, but an investor is completely capable of integrating the best elements of each into their own independent strategy for investing success.

Enjoying this series so far MDJ!

By: Sampson

Sampson — Tue, 12 May 2009 15:08:43 +0000

Hey FT, in addition to the three strategies (which I’d categorize under fundamental analysis) – technical analysis is one strategy some use to ‘actively’ select investments. Others might call it Voodoo though ;)