As you become more comfortable with the fundamentals of investing, you might want to explore some of the concepts that can help you take your strategy to the next level. While these ideas might sound complex, they can be understood and used with a pragmatic, clear approach. This is an energetic way to deepen your knowledge and make your investing journey even more rewarding.
Thematic investing: focus on what you believe in
Traditional investing often focuses on specific sectors or broad market indexes. Thematic investing, however, looks at powerful, long-term trends shaping the future and invests in the companies that are set to benefit.
For example, a thematic investor might choose to focus on trends like:
- Clean energy: Investing in companies involved in renewable energy and sustainability.
- Artificial intelligence (AI): Investing in companies that are at the forefront of AI and robotics.
- The digital economy: Investing in companies that are transforming the way we live and work through e-commerce and digital services.
Thematic investing allows you to align your investments with your personal values and beliefs. It’s a way to be a part of the trends that you think will change the world, and it can add a powerful sense of purpose to your investing journey.
Understanding market cycles
Markets don’t just go up in a straight line; they move in cycles. While it’s impossible to predict exactly when these cycles will begin or end, understanding them gives you a clearer perspective on market behaviour.
A market cycle typically has four phases:
- Accumulation: This is the bottom of a downturn, where smart investors start buying assetsAn asset is anything that holds value and which can be bought and sold freely. at low prices.
- Mark-up (or bull market): This is when the market starts to grow, and prices rise as more people start investing.
- Distribution: This is when the market peaks, and early investors start to sell off their assets.
- Mark-down (or bear market): This is when prices fall, and the market enters a downturn.
By understanding these cycles, you can avoid emotional decisions and stay focused on your long-term plan. For a long-term investor, a market dip is just a temporary phase, and a great opportunity to add money to their account at a lower price.
Ethical investing
Ethical investing, also known as ESG (Environmental, Social, and Governance) investing, is a growing trend that allows you to invest in companies that align with your values. You can choose to invest in fundsFunds, also called ‘tracker funds’, are financial instruments that have been set up to match or ‘track’ the price of a market index. Investing in a fund lets you get exposure to different financial assets like shares and bonds, without having to buy them directly. that actively consider a company’s impact on the environment, how it treats its employees, and how it is governed.
This adds a moral dimension to your investing. It is a confident and intentional choice that can provide not just financial returns but also a powerful sense of purpose.
These are just a few of the concepts that can help you deepen your understanding of investing. The more you learn, the more confident you’ll feel about your financial journey. It’s a continuous learning process that can lead to incredible opportunities and give you peace of mind.
Ready to explore a more advanced strategy? Top up your account today. Or, if you’re not investing yet – a Stocks & Shares ISA is a popular account with existing Moneybox investors.
Capital at risk. The value of your investments can go down as well as up, and you may get back less than you invest. All investing should be long term. Tax treatment depends on individual circumstances and may be subject to change in the future.