Trading vs Investing, the most cliche and common question everyone has before they start their stock market journey.
It is better to understand both the terms, implications, the risk involved etc before you really get into it…Don’t worry we will make it very very simple and avoid difficult terms to explain trading vs investing.
Trading
Buying and selling shares or derivatives daily or more frequently to make profits in the short term like a day, a week or a month.
Investing
Investing is buying stocks with an objective to create wealth in the long term
Trading vs Investing
We will stay away from a standard explanation of trading vs investing, however, try to help you understand what’s right for you.
See, Trading is like a full-time job, you need a strategy in place, a plan in place need to do your homework before the market opens and aftermarket opens and then sit in from of the screen to trade or do your business. Yes, it’s no less than doing a business.
Imagine you are running a business or a shop and hardly visit the shop once a month? What will happen?
Do you think the shop will still run and run at an optimal level that you will make profits? The answer is probably no…
Similarly, Trading is owning a business or taking up a full-time job.
If you have a full-time job and are looking to invest your surplus money then TRADING IS NOT FOR YOU. We do not intend to discourage you for trading, just want to inform that if you decide to start trading then it’s no less than a mission and its need 100% dedication of time and effort.
Investing on other hand is buying stocks for the long term with your surplus money in order to create wealth. Investing can be done via mutual funds or buying good quality stocks for 3 years or more. It’s a misconception that Investing does not make you rich, Great money is made over the long term and patience is key. Investing is buying great stocks and sitting tight.
If you are a salaried professional or have a business or a job than investing is a better option for you.
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