Category: Portfolio Strategy

Portfolio strategy is the philosophy of an investor. It is a set of guiding principles or behaviors for investing money. They often involve a trade-off between risk and reward.

For instance, a dividend growth investor will purchase dividend growth stocks, while an income investor will buy high-yield stocks. Similarly, an index investor buys passive index mutual funds.

Asset classes can also define portfolio strategies. For example, a person following a 60/40 strategy will split their retirement assets into 60% equities and 40% bonds.

Other examples include buy and hold, dollar cost averaging, Dogs of the Dow, the Bogleheads 3-fund portfolio, and the Coffeehouse Investor Portfolio.