Strategic decisions often have long-term consequences. The strategy of emphasizing stock rather than cash investments in your tax-deferred accounts tends to make a significant difference in the value of those accounts after 20 or 30 years. Similarly, diversifying within an asset class helps to insulate you from unexpected risks, such as poor management decisions, that can drive investment value down.
But some short-term decisions are strategic, too. There are several short-term approaches to investing you can use to increase your gains, though they also increase your risk of incurring losses. These include selling short, buying on margin, and momentum investing — all of which are based on your assessment of what is likely to happen in the securities markets in the next few days or weeks.
