Similar to different taste for food for storage, an investor may consider different types of stocks aligned to own taste (personality or strategy), there are pros and cons for each type of stock:
1) Undervalue stocks
– Good for price less than value
– Bad for trading to buy low get lower (downtrend)
2) Cyclic stocks
– Good for swing trading in shorter term
– Bad for position trader to buy and hold
3) Growth stocks
– Good for buy & hold
– Bad for buy and run with weak holding power or low risk tolerance level
4) Momentum stocks
– Good for position trading
– Bad to buy low sell high for limited gain
5) Dividend stocks
– Good for passive income
– Bad for capital loss with downtrend price
6) Crisis stocks
– Good to buy very low
– Bad to buy rotten stock (weak FA)
… and more types of stocks in different sectors and countries.
When Ein55 readers have more time at home during Coronavirus crisis, besides storing food, collecting mask, also do homework on potential stocks to collect. Since current global/US stock market is still at high optimism, consideration will be mainly for shorter term trading or investing, despite certain regional market stocks (eg. Singapore, China, Hong Kong, Malaysia, etc) could be discounted by more than 30-50% in share prices, may not be a good choice to show hand for longer term investing with all the capital as the best investing opportunity timing is not ripe yet.
Learn more details of LOFTP Strategies (Level / Optimism / Fundamental / Technical / Personal Analysis) by Dr Tee: www.ein55.com
