10 Investment Tips for Beginners: #3. Don’t confuse investing with trading.
Posted on | March 31, 2009 |
Investing can be viewed as buying shares of an appreciating asset, and holding for the long term time horizon. Buying shares of the Vanguard total stock index fund for retirement, is one example. Another example of investing is buying shares in a business when the share price is close to or less than the value of the underlying assets, but the business itself is sound.
Trading is buying an asset you plan to hold for a much shorter period of time, and may appreciate simply because of momentum or increased demand for the stock and not because the underlying business has increased in value. In general, investing is for the long term, while trading is riskier and sometimes thought of more like gambling.
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Tags: Investing > Stock Market > Tips
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[...] Follow The Rules 2 Be Aware Of Taxes 3 Don’t Confuse Investing With Trading 4 Tune Out The Media 5 Don’t Tune Out Too Much 6 Pay Attention To Risk 7 Don’t Avoid [...]