Sunday, June 2, 2013

Momentum leverage: Exploring the world of opportunistic investing



Most investors are familiar with the investment advice “buy low, sell high”—a strategy that involves buying assets at their lowest prices and selling them later for a much higher price. By doing this, investors can prevent untoward losses and instead profit from their active engagement in the free markets.



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But with the diversity of investment activities, not all investors use this strategy in the same degree as others. Some of the emotional ones tend to exit the market during a bearish run, probably in an attempt to preempt further losses, thus taking full advantage of this advice. On the other hand, some investors stick to this principle and take full advantage of the market momentum whenever it presents itself. This type of investing is called opportunistic investing.



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This investing strategy, adopted by asset management mavens such as Alex von Furstenberg, seeks to yield the highest possible returns by seeking available investment opportunities at any given time regardless of self-imposed limitations or conventional investing algorithms. This is done by searching for potentially lucrative yet underperforming and currently depressed properties and acquiring them via a great deal of borrowed funds—a seeming imbalance which causes other investors to behave irrationally. After a short holding period, opportunistic investors take advantage of this momentum to sell the property at prices which yield at least 20 percent in profit.

Apart from the large yields, opportunistic investors also experience a low degree of volatility, making this approach one of the more stable paths toward investing success.



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Opportunistic investing is Alex von Furstenberg’s claim to fame in this extremely volatile industry. Find out more about his business practices at AlexVonFurstenberg.com.