Growth, Value, and Momentum Investing Styles

Investment Snapshot

* At the time that the Dow Jones Industrial Average (DJIA) reached a record high, individual investors are turning away from foreign stocks and investing in U.S. stocks.
* The average price/earnings ratio of the DJIA was 22 and that of the Nasdaq composite was 35 as of October 2006.
* For the first eight months of 2006, value stocks outperformed growth stocks.
* In overnight trading on November 3, 2006, Whole Foods Market’s stock price fell by more than 20 percent and Electronic Arts’ stock price increased by 11 percent.
* In 2005, growth stocks outperformed value stocks.
* One investment style is usually dominant at any given time.

The preceding three chapters covered fundamental and technical analysis methods for selecting stocks and an evaluation of the different investment strategies, respectively. Armed with this information, you are now ready to construct a portfolio using an investment style that is suitable for your particular needs and circumstances.

KEY CONCEPTS
* Investment style
* Selection of stocks using a value equity style
* Selection of stocks using a growth equity style
* Selection of stocks using a blend of growth and value styles
* Momentum investing style

Lack of Trading Plan
Planning plays a key role in the success or failure of any endeavor

Using too much Leverage
Determining the proper capital requirements for trading is a difficult task

Failure to control Risk
Refusing to employ effective risk control measures can ensure your long-term failure

Lack of Discipline
A lack of discipline can destroy even the most talented and best prepared trader

Useful Advices to Beginning Trader
You can control your success or failure

All about Stocks
Encyclopedia about Stocks. That you should know about Stocks before starting

Forex Glossary
All terms about Forex market