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There are three major types of securities in which people invest, stocks, bonds, and derivatives. The main part of any investment strategy is to developed a balanced portfolio inculding all three types of securities, cash, and other investments such as real estate.
The first major strategy most investors use is to limit exposure to any one market sector. This would mean building a portfolio balancing investments in developing and emerging economies, and balancing sectors such as consumer goods, natural resources, technology, pharmaceuticals, and financials. There should also be a good balance between stocks and bonds.
Another strategy is looking a price-earnings ration and other indicator of the value of companies and holding stocks with solid underlying value; Warren Buffet has been extremely successful with this strategy.
Other strategies depend on momentum and market timing, although these are probably not viable for any but larger professional investors.
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