Long-term investing

A map of long-term investment methods

These approaches are not mutually exclusive. Each group answers a different investing question: what to own, how to access the market, which cash-flow objective to pursue, how to construct a portfolio, and how to deploy capital.

17 approaches

Business selection

Which criteria should I use to select a business?

6

Role: Business selection01

Value investing

Buy assets below a conservative estimate of intrinsic value and wait for price and value to converge.

Role: Business selection02

Growth investing

Own businesses capable of compounding revenue, earnings, and free cash flow over many years.

Role: Business selection03

Quality investing

Favor financially strong companies with durable advantages, sound governance, and high returns on capital.

Role: Business selection04

Growth at a reasonable price

Seek above-average business growth without paying a price that requires perfect future results.

Role: Business selection05

Contrarian investing

Investigate assets rejected by the market when pessimism may be greater than the fundamental damage.

Role: Business selection06

Deep value investing

Seek severely undervalued securities where assets, normalized earnings, or liquidation value offer strong downside protection.

Market and factors

Which part of the market do I want to access?

4

Role: Market and factors07

Index investing

Own a broad market through low-cost index funds instead of selecting individual winners.

Role: Market and factors08

Factor investing

Build systematic exposure to persistent return drivers such as value, quality, momentum, size, or low volatility.

Role: Market and factors09

Thematic investing

Invest around long-term structural changes such as digitization, demographics, energy transition, or automation.

Role: Market and factors10

Sector investing

Concentrate research or portfolio exposure in industries where economics, cycles, and competitive structures are well understood.

Income

How should the portfolio generate cash flow?

3

Dividend investing

Own financially sound companies that distribute a meaningful and sustainable share of cash flow to shareholders.

Dividend growth investing

Build a portfolio of businesses able to increase cash distributions while preserving financial strength.

Income investing

Construct a portfolio around dependable cash flows from bonds, dividend shares, or other income assets.

Portfolio construction

How should I combine assets and strategies?

2

Role: Portfolio construction14

Core-satellite investing

Combine a diversified, low-cost core with a smaller active sleeve for selected ideas or objectives.

Role: Portfolio construction15

Multi-asset investing

Combine equities, bonds, cash, real assets, and other exposures so different return drivers share portfolio risk.

Capital deployment

When and at what pace should I put money to work?

2

Role: Capital deployment16

Dollar-cost averaging (DCA)

Invest a fixed amount on a regular schedule instead of making the decision depend on short-term market forecasts.

Role: Capital deployment17

Lump-sum investing

Deploy available capital at once according to a predetermined allocation so the money enters the market immediately.