So I invited a few people to Freetrade and encouraged them to invest.
One of the people I invited took the stance that they were âonly going to invest in fashion companiesâ. When I asked them the reason why they took this rather unusual investing strategy they said âbecause fashion companies are coolâ. I reminded them itâs a good idea to diversify their portfolio and left them to their investment journey. Iâve also heard someone refuse to invest in crypto because âit is imaginaryâ
To each their own. Nevertheless their quotes got me thinking what are the most unusual/different investment strategies you have heard people engaging in?
I donât think its that bad as a start point, its basically somebody picking a sector they love and working with it. But youâd have to be very good at selection to make diversifying unnecessary as you say
$BECKY index is a collection of stocks which a Basic young female would buy products from. i.e Apple, Starbucks, Disney. Itâs outperformed the S&P500
Someone actually maintains this index and it has some popularity for Robinhood investors
Yes diversification is quite important. No idea if fashion was an area they loved or simply thought that was going to be an area where they make a lot of money.
Even if it is (and this can lead to a large philosophical debate as to the reality in which we live) I still donât think thatâs a good enough reason not to invest in cryptocurrency. Had we all jumped on the crypto bandwagon at the start I imagine a fair few of us would be âimaginaryâ millionaires/billionaires
My strategy is do as much research as possible from a variety of sources and make prudent investments from that research. The problem is that there is just so much research all competing against one another for your money. I think the next big thing is going to be an algorithm that compartmentalises all that stock and share advice from all those sources. I donât think my strategy really counts as a strategy to be fair.
I think it is strong for someone to invest in what they love and are knowledgable about but Iâm not sure the OP was suggesting this person had knowledge but at least desire. But yes, as everyone has noted including the OP, diversifying is so important.
I think that can work for identifying new companies, ie a new restaurant chain thatâs always busy or a new fashion retailer thatâs got good clothes
Exactly my point. This was not a sector the person had knowledge of, but merely one that they had a desire to invest in without any diversification. Again there is nothing wrong with this. I just thought it was an unusual strategy given that just because a company is âfashionableâ (pardon the awful pun) doesnât mean it will make a good investment.
You can still diversify, but if you find yourself and friends using a new company a lot it may be that you can get in early on an up and coming growth prospect. I wouldnât throw your whole life savings on it though