Make to order (MTO) is a manufacturing strategy where products are only produced after receiving an order from a customer. In the context of investment, MTO refers to a strategy where an investor only buys or sells securities when there is a specific demand or need for them.
In MTO investing, investors may hold off on buying or selling securities until there is a specific opportunity or need, such as when the market conditions are favorable or when a particular security becomes undervalued. This strategy can help to reduce the risk of overbuying or overselling securities and can allow investors to take advantage of specific opportunities as they arise.
MTO investing is often used by value investors, who seek to buy securities that are undervalued by the market and hold them for the long term. By waiting for specific opportunities to buy or sell, MTO investors can reduce the risk of buying securities at a price that is too high or selling them at a price that is too low.
However, MTO investing also has some drawbacks. Waiting for specific opportunities can mean missing out on market gains or losses in the interim, which can impact overall returns. Additionally, MTO investing requires a thorough understanding of market trends and analysis to identify opportunities, which can be time-consuming and complex.
Overall, MTO investing can be a useful strategy for investors who are willing to take a patient and disciplined approach to investing. By waiting for specific opportunities to buy or sell securities, MTO investors can reduce risk and potentially maximize returns over the long term.