The Best Investing Strategy for Beginners

Research Article
Open access

The Best Investing Strategy for Beginners

Jitong Yu 1*
  • 1 University of Toronto    
  • *corresponding author jitong.yu@mail.utoronto.ca
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/14/20230832
AEMPS Vol.14
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-71-3
ISBN (Online): 978-1-915371-72-0

Abstract

More and more people are getting into the investment industry, which is not an easy job for some beginners. Complicated strategies and varied portfolios can often feel overwhelming and also lead investors into one misunderstanding after another. In order to reduce the hassle of investing, this article will pick the four most common and easy-to-understand strategies: momentum investing, comparing PEG ratios, merger arbitrage strategy, and market-neutral trade. From a version of beginner on how to start an investment portfolio. The background of the eight films selected in this paper will be introduced first, mainly about what the film does. Moreover, the uses of the strategy will be present, as the theory behind them. Then, this paper will present detailed progress, including stock price tendency, results, and future improvements. The calculation of PEG ratios and market-neutral strategy will also be included. Finally, a comparison is also made in this paper, which can deliver the feasibility of each strategy base on the four pairs of trades made. It also introduces how a manager new to stocks makes a decision and the results obtained and sums up a strategy that is most suitable for beginners to invest. However, it is just a brief explanation; different investment portfolios need to use different investment strategies and try more to get more returns.

Keywords:

momentum investing, PEG ratio, merger arbitrage strategy, market neutral trade

Yu,J. (2023). The Best Investing Strategy for Beginners. Advances in Economics, Management and Political Sciences,14,250-257.
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References

[1]. Asness, Clifford, et al. "Fact, fiction, and momentum investing." The Journal of Portfolio Management 40.5 (2014): 75-92.

[2]. Lui W, Strong N, Xu X. The profitability of momentum investing[J]. Journal of Business Finance & Accounting, 1999, 26(9‐10): 1043-1091.

[3]. Swinkels L. Momentum investing: A survey[J]. Journal of Asset Management, 2004, 5(2): 120-143

[4]. Arak M, Foster R W. PEG ratios: What makes sense? [J]. The Journal of Investing, 2003, 12(2): 19-24.

[5]. Schatzberg J D, Vora G. PEG investing strategy: A revisit[J]. Quarterly Journal of Finance and Accounting, 2009: 5-22.

[6]. Yang T, Branch B S. Merger arbitrage: evidence of profitability[J]. The Journal of Alternative Investments, 2001, 4(2): 17-32.

[7]. Tuan J, Hsu J C, Zhang J, et al. Merger arbitrage profitability in China[C]//International Conference on Management Science and Engineering, Press of Harbin Institute of Technology. 1995.

[8]. Maheswaran K, Yeoh S C. The profitability of merger arbitrage: some Australian evidence[J]. Australian Journal of Management, 2005, 30(1): 111-126.

[9]. Block S B. Merger arbitrage hedge funds[J]. Journal of Applied Finance, 2006, 16(1)

[10]. Beliossi G. Market neutral strategies[J]. The Journal of Alternative Investments, 2002, 5(2): 93-96.

[11]. StockTrack, https://www.stocktrak.com

[12]. Grundy, Bruce D., and J. Spencer Martin. "Understanding the nature of the risks and the source of the rewards to momentum investing." The Review of Financial Studies 14.1 (2001): 29-78.

[13]. Kirchner, Thomas. Merger arbitrage: how to profit from global event-driven arbitrage. John Wiley & Sons, 2016.

[14]. Seeking Alpha Homepage, https://seekingalpha.com/news/3858590-canal-plus-in-advanced-talks-to-acquire-orange-media-groups-variety, last accessed2022/7/20

[15]. Easton, Peter D. "PE ratios, PEG ratios, and estimating the implied expected rate of return on equity capital." The accounting review 79.1 (2004): 73-95. LNCS Homepage, http://www.springer.com/lncs, last accessed 2016/11/21.

Cite this article

Yu,J. (2023). The Best Investing Strategy for Beginners. Advances in Economics, Management and Political Sciences,14,250-257.

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About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN：978-1-915371-71-3(Print) / 978-1-915371-72-0(Online)
Editor：Canh Thien Dang, Javier Cifuentes-Faura
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.14
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Asness, Clifford, et al. "Fact, fiction, and momentum investing." The Journal of Portfolio Management 40.5 (2014): 75-92.

[2]. Lui W, Strong N, Xu X. The profitability of momentum investing[J]. Journal of Business Finance & Accounting, 1999, 26(9‐10): 1043-1091.

[3]. Swinkels L. Momentum investing: A survey[J]. Journal of Asset Management, 2004, 5(2): 120-143

[4]. Arak M, Foster R W. PEG ratios: What makes sense? [J]. The Journal of Investing, 2003, 12(2): 19-24.

[5]. Schatzberg J D, Vora G. PEG investing strategy: A revisit[J]. Quarterly Journal of Finance and Accounting, 2009: 5-22.

[6]. Yang T, Branch B S. Merger arbitrage: evidence of profitability[J]. The Journal of Alternative Investments, 2001, 4(2): 17-32.

[7]. Tuan J, Hsu J C, Zhang J, et al. Merger arbitrage profitability in China[C]//International Conference on Management Science and Engineering, Press of Harbin Institute of Technology. 1995.

[8]. Maheswaran K, Yeoh S C. The profitability of merger arbitrage: some Australian evidence[J]. Australian Journal of Management, 2005, 30(1): 111-126.

[9]. Block S B. Merger arbitrage hedge funds[J]. Journal of Applied Finance, 2006, 16(1)

[10]. Beliossi G. Market neutral strategies[J]. The Journal of Alternative Investments, 2002, 5(2): 93-96.

[11]. StockTrack, https://www.stocktrak.com

[12]. Grundy, Bruce D., and J. Spencer Martin. "Understanding the nature of the risks and the source of the rewards to momentum investing." The Review of Financial Studies 14.1 (2001): 29-78.

[13]. Kirchner, Thomas. Merger arbitrage: how to profit from global event-driven arbitrage. John Wiley & Sons, 2016.

[14]. Seeking Alpha Homepage, https://seekingalpha.com/news/3858590-canal-plus-in-advanced-talks-to-acquire-orange-media-groups-variety, last accessed2022/7/20

[15]. Easton, Peter D. "PE ratios, PEG ratios, and estimating the implied expected rate of return on equity capital." The accounting review 79.1 (2004): 73-95. LNCS Homepage, http://www.springer.com/lncs, last accessed 2016/11/21.

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