Innovative Capital Management

What does it mean about innovative capital management? What is the purpose of this innovative capital management? If you are interested, let’s find out below.

What Is Innovative Capital Management?

Innovative capital management is a form of investment that involves the use of a myriad of strategies. It can be divided into four groups as follows:

1. Simple/Fundamental Asset Management

This strategy aims to maximize the risk-adjusted returns. It is also known as “value investing” which was popularized by Warren Buffett. So this strategy is the most common, and it is also the most commonly used by investors. 

Many experts believe that value investing is a good strategy for small- and medium-sized companies with a lot of growth potential.

2. Concentrated or Specialized Asset Management

This strategy aims to achieve high returns by investing in stocks with a specific characteristic. The investor who implements this strategy has extensive knowledge of the industry or sector.

So they invest in stocks with high potential but have low marketability. Also, this is a risky but potentially profitable investment strategy, which is often used in hedge funds. 

In addition to the characteristics mentioned above, it can also involve industry or sector that has potential for expansion.

3. Unconventional Asset Management Strategy (Value Investing)

This strategy has many definitions, but all are consistent with value investing strategies. That is widely used by investors today (such as Warren Buffett). 

The difference here is that this unconventional value investing strategy can also be implemented by proprietary traders on Wall Street as well as hedge funds. So it’s not just limited to individual investors like you and me.

4. Alternative Asset and Risk Management Strategy (Arbitrage)

The purpose of this strategy is to make money from discrepancies in the market price. It is between several assets with different prices (for example securities and commodities). 

The essence of arbitrage trading is to buy assets at lower prices in one market before selling at higher prices in another market. So this process will generate profits because the gap between market prices is only temporary.

And also will eventually be closed through arbitrage trades (buying low and selling high). So this technique can also be called short-term trading because it takes place in short timeframes (less than a day or even less than an hour). 

If you want to know more about this short-term trading process, you can read my previous article here. So this type of asset management is based on the principle of arbitrage trading, which is unique compared to other forms of investment.

What is the purpose of this innovative capital management? If you are interested, let’s find out below.

Purpose of Innovative Capital Management

The purpose of innovative capital management is to maximize the return from asset investment while minimizing the risk. 

So this is to achieve higher returns with less risk. Also, this concept can be achieved by using different strategies. 

So we will also share some of my own experience here, which is related to financial trading. I’ve been looking for stocks to buy online for quite some time now. 

The most frustrating part is that I don’t know where or how to start looking for stocks that are worth buying. And after a lot of research, we discovered an online source that provides stocks that are worth buying right now.