| Long Term Investing And Short Term Trading |
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| Written by Shaun Rosenberg |
| Wednesday, 14 April 2010 14:05 |
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Investing into stocks over the long term and trading stocks are two conflicting points of view. So, which one is better? Well this really depends; each strategy has its advantages and disadvantages.
Investing into stocks over the long term and trading stocks are two conflicting points of view. So, which one is better? Well this really depends; each strategy has its advantages and disadvantages. Long term investing is a simply strategy. The idea behind it is to get into stocks that are fundamentally strong and then simply hold onto them over the long term. As time goes by these investments are unlikely to go to 0 and in fact they are likely to keep appreciating as the companies behind them continue to grow. Short term trading on the other hand is a little different. The idea behind short term trading is not to buy and hold stocks for the long term, but rather to catch the short term ups and downs. As a result most traders put more meaning to technical indicators and chart patterns then fundamental analysis. Which one of these strategies is the best strategy for you? Well this kind of depends, there are different advantages to both and depending on your personality you may find one way fits you better then another. Short term trading does have a higher potential then long term investing. After all if you are able to make consistent small gains from the market then the power of compound interest will really be a huge indicator. However this does come with a tradeoff. Short term trading does take a lot more work and there is no guarantee that you will make money or beat the market. But if you do keep at it and learn from your mistakes your chances are good. If you have the time and willingness trading in the short term can be a fun adventure. But if you would rather invest your money into something which is relatively safe and gives off a decent return over the long term then buying and holding stocks or ETFs can be a fantastic way of doing that. The major advantage of doing this is that it is passive and it is considered to be secure. It basically comes down to this. If your goal is to just invest your money into something that will most likely give you a decent return over the long term and not have to worry about it then buying a few ETFs or building a diversified portfolio of stocks can work out pretty well. But if you want to put more effort into your investments in hopes of getting more from it then short term trading can work out pretty nicely. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. For some Tips for Stock Traders or more about stocks visit Shaun's site that helps people learn stock trading Get a totally unique version of this article from our article submission service |
| Last Updated on Thursday, 03 June 2010 09:44 |