It has long been known in the stock market world that one should try to let profits run and cut losses. This represents the basis of the 3:1 rule developed by Joachim Goldberg. In order to achieve success with this strategy in the stock market, investors must be very disciplined. Strict adherence to the 3:1 rule increase their profit opportunities on the exchange in the long run.
Shares or bonds – which product is better for investors in the long run? This is a question without a general answer, because both types of investment have pros and cons. Therefore, a well-mixed portfolio should contain both. The advantage of shares is their long-term earnings strength. One cannot earn as much with bonds, but they, on the other hand, have the huge advantage of lending stability to one’s portfolio. To figure out the right mix of shares and bonds, using a general rule of thumb can be helpful: stock quotient equals 100 minus your age.
Heavyweight Strategy, Betting on the big players
Size matters. Large companies usually have high turnover, profitability and a strong market position, which reflects the success of a company's products and services. Moreover, large corporations are more stable financially than smaller companies, which makes it easier for them to pull through in a crisis.
Solid equities are more profitable in the long run. Because of the risk of short-term price losses, many investors opt for fixed-income securities. This conservative approach limits risks, but it does so at the cost of profit opportunities. This is where the 90:10 strategy comes in.
Export growth rates are on a continuously high level. German companies with a high share in export turnover have a strong correlation with the global economy. Investors can now easily identify and invest in these companies: the strategy index DAXplus Export Strategy contains the ten strongest exporters from DAX® and MDAX®.
The summer months on the stock exchange are slow. This old wisdom is indeed proven by statistics. Exchange trading only picks up again in autumn. Investors can now bet on this principle. An index simplifies the strategy. It simply ignores the weaker months of August and September.
Sustained value instead of losses is a key for investors. Professionals use complex structures to increase performance while limiting risk. This type of strategy is reflected by covered-call writing – the investor sells an option while simultaneously purchasing the underlying shares. This approach has now been made accessible to all investors by the DAXplus® Covered Call index, which tracks the strategy.