Welcome to week four of the Husky Investment Tournament!
When you think of investing what comes to mind? Is it finding the next Facebook? The S&P 500? Tesla? Amazon? While all of the above have their time and place, let’s talk about the different types of investing this week.
Three distinct types of investing have been talked about throughout the financial world. Fundamental investing is the type that comes to mind most people. The people that follow this type of investing look deep into a company and its financials to determine whether they should invest. Next, is technical investing. The people that participate in this type of investing will focus on forecasting trends that happen in stock prices. They spend a large portion of their time reading charts. Lastly, we have quantitative investing. Under this type of investing high-frequency algorithms are developed and implemented. This type of investing drives a lot of our current stock market today.
Referencing back to our week two post, what style of investing do the Reddit traders fit? Very good question. There could probably be an argument that they are following a technical strategy because they are exploiting trends in the stock price movements. However, in my opinion, I would place these traders in their own bucket. They have their own unique type of investing based on a forum from the internet. In this week’s video, Trevor Salata discusses the different types of investing in further detail.