9 Investment Strategies for New Investors

The best investing strategies increase returns, minimize risk and meet your goals. Find the strategy that’s right for you.

Updated Jan 5, 2023

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Nerdy takeaways

• The best investment strategies increase the money investors make and decrease their exposure to risk.
• The strategy will vary depending on your end investment goal and its timeframe, your risk tolerance and how involved you want to be in choosing individual investments.
• Many investors combine multiple strategies to find the best personalized strategy to fit their situation.

What’s an investment strategy?

An investment strategy is a way of thinking that shapes how you select the investments in your portfolio. The best strategies should help you meet your financial goals and grow your wealth while maintaining a level of risk that lets you sleep at night. The strategy you choose may influence everything from what types of assets you have to how you approach buying and selling those assets.

If you’re ready to start investing, a good rule of thumb is to ask yourself some basic questions: What are your goals? How much time until you retire? How comfortable are you with risk? Do you know how much you want to invest in stocks, bonds or an alternative?

This is where investment strategies come into play.

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9 popular investment strategies

There are numerous ways to approach investing, and here are some of the more popular investing strategies to consider.

1. Start with a new or existing retirement account

One way to begin investing is through a retirement account. Open or access an individual retirement account, or IRA, through a brokerage account. Then choose investments that are aligned with your goals.

If you already have a retirement account through your employer, it’s generally a good idea to contribute to that 401(k) first — and qualify for the company match — before you start funding your IRA. Employer match programs are free money you don’t want to leave on the table.  

However, you should know that most 401(k)s offer relatively few investment choices, so the options for strategy within those vehicles are usually limited. Whereas IRAs give you access to a more expansive world of investments than your 401(k) may offer. 

You can also trade through a brokerage account for long-term goals other than retirement.

» Need more direction? Read How to Invest at Any Life Stage

2. Buy-and-hold investing

It’s always nice when things have a clear label, and you can’t get much clearer than “buy and hold.” Buy-and-hold strategists seek investments they believe will perform well over many years. The idea is to not get rattled when the market dips or drops in the short term, but to hold onto your investments and stay the course. Buy-and-hold works only if investors believe in their investment’s long-term potential through those short-term declines.

This strategy requires investors to carefully evaluate their investments — whether they are broad index funds or a rising young stock — for their long-term growth prospects upfront. But once this initial work is done, holding investments saves time you would have spent trading, and often beats the returns of more-active trading strategies.