10 Investment Methods

Good morning, let’s get into it!

This month is the beginning of me investing again, but for the first time in NewGold, and I’m doing this with my best friend, you know. Invest with your friends; he will also be contributing by the end of the month. Our goal is to have a minimum of P20,000 invested in NewGold by December 2026. However, we aim for a combined net worth of P100,000 plus within 4 years. But what we will be using is the method of Index/ passive investing.

I know for some, 100k isn’t a lot of money in 4 years, but you have to understand, this won’t be the only thing we would invest in, and NewGold may have years where it grows more than 19% annually, like this year it has grown by 70.1% so far. There are more stocks we will be studying. So let’s get to the methods

1. Dollar-Cost Averaging (DCA)

What it is:
Invest a fixed amount of money at regular intervals (e.g., monthly), no matter what the market is doing.

Example:
You invest P500 every month into the NewGold ETF. Sometimes you buy at a high price, sometimes at a low price — but over time, your average cost smooths out.

Best for:

• Beginners

• Long-term investors

• Volatile markets (like stocks or crypto)

Benefit:
Removes emotion and “timing the market.”

2. Lump-Sum Investing

What it is:
Invest all your available money at once.

Example:
You have P10,000, and you buy shares of FNBB today.

Best for:

• When markets are undervalued

• When you already have a long-term horizon

Benefit:
Historically gives higher returns if the market keeps rising.
Risk: If you invest just before a market drop, you feel the full hit immediately.

3. Value Investing

What it is:
Look for undervalued assets — companies trading below their true (intrinsic) value.

Example:
A stock like Sefalana trades at a low P/E ratio and high dividend yield compared to its fundamentals, so you buy and hold it until the market corrects.

Best for:

• Patient investors who research

• Investors who believe in “buy low, sell high”

Famous for: Warren Buffett’s approach.

4. Growth Investing

What it is:
Invest in companies expected to grow faster than the market — even if they seem expensive now.

Example:
Buying shares in fast-growing regional companies, tech startups, or innovation funds.

Best for:

• Young investors

• Long-term wealth builders

Risk: High — price swings and volatility.

💸 5. Income Investing

What it is:
Focus on investments that regularly pay dividends, rent, or interest.

Example:

• Dividend-paying stocks (FNBB, BIHL)

• Rental property

• Bonds and money market funds

Best for:

• People seeking a steady cash flow

• Retirement or financial independence goals

6. Index or Passive Investing

What it is:
Buy ETFs or funds that track an index (like Satrix Top 40 or NewGold ETF) and hold them long-term.

Example:
Every month, you buy P500 of a Satrix ETF instead of picking individual stocks.

Best for:

• People who don’t want to research stocks

• Long-term wealth growth

Benefit:
Low fees and proven long-term performance.

7. Contrarian Investing

What it is:
Go against the crowd — buy when others are fearful, sell when others are greedy.

Example:
When a good stock drops sharply due to market panic (not poor fundamentals), you buy more.

Best for:

• Experienced investors

• Those who understand market psychology

8. Momentum Investing

What it is:
Buy assets that are already rising, and sell when the trend reverses.

Example:
You notice gold has been climbing for months; you buy the NewGold ETF and plan to sell when the trend flattens.

Best for:

• Active traders

• Short- to medium-term investors

Risk: Requires close monitoring.

9. Asset Allocation & Rebalancing

What it is:
Spread your investments across different asset classes (stocks, bonds, ETFs, property), then rebalance periodically.

Example:
Start with:

• 60% stocks

• 30% bonds

• 10% cash

If stocks grow faster and become 70%, you sell some to restore balance.

Best for:

• Long-term investors

• Managing risk while still growing wealth

10. The “Core–Satellite” Strategy

What it is:
Keep a stable “core” portfolio (ETFs or index funds) and add smaller “satellite” investments (individual stocks, startups, crypto).

Example:

• 80% in Satrix ETFs (core)

• 20% in your own picks like Chobe Holdings or crypto (satellite).

Best for:

• Investors who want both stability and excitement.