Growth investing, value investing, dividend investing, dividend growth investing… Warren Buffett-style, Lynch-style, Dalio-esque… when it comes to investing, it seems that there are as many ways to go about it as there are stars in the sky.
But is there a right way to invest? Well, it depends whom you ask. Many investors like to point to figures like Warren Buffett for their inspiration – perhaps citing Mr Buffett's plethora of speeches, reports and oh-so-quotable lines in explaining the ideal way to allocate capital in the share market.
Others might point to a past success to define their modus operandi – 'I try and find the next CSL Limited (ASX: CSL)', for example.
The truth is that investing is like a hat – it may fit perfectly on one person whilst looking thoroughly disagreeable on another. Whichever hat you decide to wear can come down to which style fits better with your temperament, goals and personality.
I once met someone who explained to me that Buffett-style buy-and-hold appealed to him conceptually, but he couldn't deal with the impatience of waiting months and years to make a new investment 'at the right price'. Thus, he found a trading/charting strategy more appealing and made that work for him.
But you might find resonance with Buffett's ways. Finding predictable companies with unrivalled branding power like Apple, Coca-Cola and American Express is a proven route of success – if the track record of Buffett's company Berkshire Hathaway is anything to go by.
Or you might find Peter Lynch's 'turn over enough stones and you'll find winners' is a philosophy better suited to your tastes.
You might even find resonance with Ray Dalio's macro-focus and positioning using asset-class cyclicality, which his firm Bridgewater Associates has found lucrative.
Investing purely for cash flow through dividend shares is also a popular way to go about investing – who wouldn't love an ever-growing stream of dividend income to fund further investments or just your lifestyle.
One might even blend together a combination of strategies from all of these investing greats and more.
Foolish takeaway
The truth is that there is no 'right' way (although many wrong ways) to invest. There are many paths to success and many hats you can wear well. It comes down to your personal preference and which style resonates with your worldview and temperament.
In my opinion, you can't go wrong if you learn from your past wins as well as your mistakes and always keep your eyes on the prize.
