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Active Growth Investor
Overview of your Investing Style
Active Growth Investors take a proactive approach to stock investing, capitalizing on short-term price movements and company fundamentals. Though they may not always get it right, they are comfortable predicting market trends and making active trades in order to achieve higher returns than what might be achieved through traditional passive growth investing.
This is different to day trading, where profits are made from exploiting small price movements in stocks over a short period of time (within a day). Active Growth Investors often take a longer-term view (over weeks or even months) and look to capitalize on larger price swings as well as company fundamentals such as earnings reports and news releases.
Advantages of Active Growth Stock Investing
1. Potential for Higher Returns
With an active approach to investing, investors can potentially generate higher returns than what might be achieved through passive growth investing. This is because active investors are able to capitalize on short-term price movements and company fundamentals.
Active Growth investors have more flexibility in terms of when and how they trade, allowing them to capitalize on shorter-term trends and opportunities as they arise. This is because they can free up capital quickly in order to take advantage of these opportunities.
By actively trading, investors are better able to diversify their portfolios across different stocks and industries, reducing the risk associated with any one investment. This is especially relevant given that industries shift in favour over time, resulting in the potential for different investments to perform differently.
4. Hedge Against Market Volatility
Active growth stock investing allows investors to better manage their risk exposure and hedge against market volatility. By actively monitoring the markets, active growth investors can be quick to react to sudden changes or corrections in the markets.
Disadvantages of Active Growth Stock Investing
1. Time Intensive
Active Growth investing requires more time and effort on the part of the investor compared to passive investing, as decisions must be made more quickly and often on a daily basis. Once you set up your systems, however, it only takes up about 20-30 minutes a day.
2. Higher Transaction / Brokerage Costs
Active Growth investors are often subject to higher transaction costs due to the more frequent trading activity required for this type of investing.
3. You Need More Capital To Initiate This Strategy
The minimum suggested financial requirement to best make use of this strategy is at least $10,000 in capital ready to invest. This is because as active growth investors, you are exposed to more risk in the short to medium-term, and as such, risk management strategies such as position sizing and diversification are much more important.
4. Emotional Involvement
Active Growth Stock Investing also requires more emotional involvement from the investor, as decisions must be made quickly and often on a daily basis. This can lead to emotional fluctuations which could negatively affect decision-making, especially as you will also be observing stock price fluctuations on a more frequent basis.
Download Our Free 10 Must-Have Stock Criteria Checklist
Active growth investors need to be very selective when it comes to choosing stocks. Our Free 10 Must-Have Stock Criteria Checklist is designed to help you quickly identify the best stocks and determine which ones are worth investing in.
It will save you from hours of research everyday once implemented, and only requires 5 minutes to implement so you can instantly identify what I consider the top 1% of stocks to do further research at any time.
What Active Growth Investors Need to Know
Active growth investors need to make sure that they stay disciplined, and not get caught up in short-term thinking or trends.
It is important to remember that the stock market can be unpredictable and one should always take a long-term view when making decisions (i.e. making sure the stocks you pick are financially sound).
Additionally, having solid risk management strategies in place is essential for success, as well as having access to reliable financial news sources.
Tips for Becoming A Successful Active Growth Investor
1. Develop an understanding of the markets: Take the time to understand the stock market and learn how different stocks are affected by different economic factors. A great way to do this is through our FREE LIVE Online Masterclass.
2. Research potential investments: Research potential investments thoroughly before entering or exiting any position. Make sure each stock you buy is financially sound with these 10 Must-Have Stock Criteria.
3. Keep your emotions in check: Don’t let your emotions get in the way of making sound investment decisions. A great way I do this is by going for a bike ride every morning before I check my stocks.
4. Have a plan and stick to it: Have a plan in place and make sure that you follow it. This will help to keep your emotions in check and ensure consistent results.
5. Manage your risk: Make sure to manage your risk appropriately using strategies such as position sizing and diversification. This will ensure that you remain in the game for the long-term.
Register For Our Free LIVE Online Masterclass
As an active growth investor, you need to be on top of market trends and company financials constantly.
That's why we're hosting a FREE LIVE Online Masterclass, where I'll talk about:
- How to anticipate and prepare for ANY market crash in advance in less than 30 seconds using one simple free tool
- My "traffic-light" process, so you'll know exactly when you can invest confidently, when to start being cautious, and when you absolutely MUST stop trading
- My 4 critical stock criteria that'll help you sift out the financially strongest stocks at any time in less than 5 minutes
I'll also answer any questions you have LIVE during our QnA session at the end, so come ready with any questions you may have!