What Is a 100% Equities Strategy?
A 100% equities strategy is an investment strategy that focuses solely on investing in stocks. This strategy is often used by investors looking to maximize their potential return while taking on a higher level of risk. While this strategy can offer the potential for high returns, it also comes with a greater level of volatility and risk. For this reason, investors considering a 100% equities strategy should carefully consider their goals, risk tolerance, and time horizon before making any decisions.
100% Equities Strategy Types
There are four main types of 100% equity strategies: value, growth, momentum, and earnings.
Growth
Growth stocks are those that are expected to grow at a faster rate than the market average. Momentum stocks are those that have been outperforming the market recently. Earnings stocks are those whose earnings are expected to exceed expectations.
Value
Value stocks tend to be less volatile than growth stocks and provide a higher degree of downside protection. However, they also tend to underperform in bull markets. Growth stocks tend to be more volatile than value stocks and provide a lower degree of downside protection. However, they also tend to outperform in bull markets.
Momentum
Momentum stocks are the most volatile and provide the least downside protection. However, they also have the potential to outperform the market in both bull and bear markets.
Earnings
Earnings stocks are less volatile than growth stocks and provide a higher degree of downside protection. However, their earnings may not always meet expectations, leading to underperformance.
So, which is the best 100% equity strategy for you? It depends on your risk tolerance and investment objectives. If you’re willing to take on more risk for the potential of higher returns, then a growth or momentum strategy may be right for you. If you’re looking for more stability and downside protection, then a value or earnings strategy may be a better fit.
Important Disclosures
Speak with a financial advisor to learn more about these different 100% equity strategies and which one may be right for you.
