You have to know that investing and trading are not the same thing. The returns that you are looking for, the amount of time that it will take in order to get those returns, the risk that you are willing to take, and the commitment you must make to manage your investments will determine the strategy whether you should trade or invest.
Investing
Investing is holding onto an asset for a long time period in order for the expectation that the asset will increase in value over time. The best example is the investment in equity mutual funds in a retirement plan. Most of these types of funds are held onto for several years and then are expected to have a significant appreciation over those years.
Another type of investing is investing in the stock market. You can buy, invest, in stocks of various companies and hold onto those stocks for 6 months to 18 months and sometimes even longer. This investing strategy is called the “buy and hold” strategy.
Another example of investing is buying real estate. The exception being, buying real estate in order to “flip” the property for a quick profit.
Other examples of investing are for items such as art, stamps, coins, jewelry, and other types of collectibles that are held onto for a significant amount of time in hopes that the value for these items will increase over time.
Trading
Trading is also a form of investing. However the time period for a return on that investment is for a shorter time period. Generally the time frame for returns when trading is days or weeks, but never years.
The most common example of trading is day trading, where a day trader is trading within the market and then sells the same day that they buy. Other types of trading takes place from a few days to several weeks. Many trading happens with commodities and individual stocks. The predominant trading vehicles for these things are the commodity markets.
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