An investment strategy is a plan that is developed to help individual investors reach their financial and investment goals. When creating a strategy, several different factors must be taken into account, such as age, capital, risk tolerance and goals. The strategy must reflect the investor’s willingness to take risks and the timeline they have set to reach their desired financial outcomes.

For example, investors who are nearing retirement age may prefer a more conservative strategy that preserves capital while providing steady growth, as opposed to an aggressive approach with a higher risk tolerance. Additionally, depending on an investor’s goals, they may choose between value investing, growth investing or a combination of both. Value investment focuses on undervalued stocks with a long-term outlook, whereas growth investors look for stocks that are expected to grow significantly in the short-term.

While the initial setup of an investment strategy is important, investors must also keep in mind that their individual circumstances may change over time. This can include everything from a change in job status, to having children or simply getting older. These changes may necessitate adjustments to the initial strategy in order for it to remain optimized for the current personal situation.

Successful investors know that their investment strategies need to continually evolve in order to keep pace with life’s changes. Investors should take the time to review their personal circumstances on an annual basis, and then make necessary adjustments to ensure that their strategy is still applicable. This will help to ensure that they are taking the right course of action to meet their long-term financial goals.