What is the Difference between Investors and Traders?
 |
Newbies seem to confuse the terms Investment and Trading. They use them synonymous to each other. Though, They are quite different to each other.
In simple terms, Investors buy value while traders buy price of different assets like stocks, real estate, currencies et cetera. They may be trading the same asset class at the same time while setting different goals.
 |
Let's say a stock X is currently trading at $90. Investors estimate its value (or worth) to be $100. For Investors, share X is trading at a bargain. They are buying $100 stock at a price of $ 90. At this time, let's not talk about how stock valued to be $ 100. Investors have a long-term prospective of an asset. They are not concerned about daily, weekly or monthly stock's prices. They invest in asset with a view to generate long-term cash flows. They usually do not short sell. You may be thinking that an investor would sell the stocks at $100. Maybe. As said earlier, they are concerned about cash flows more than capital gains generated from selling the stock. Though, they may employ strategies to generate capital gains with longer-term perspective taking advantage of the price mismatch generated due to circumstances like political instability, financial meltdown et cetera. Their main strategy is buy and hold relying on the fundamental analysis.
 |
Traders would buy (or sell) assets with a view of selling (or buying) at profit in the future date. The duration of the trades is short. Their main aim is to generate capital gains rather than cash flows. They may buy (sell) an overvalued (undervalued) asset and sell (buy) at profit. They are not primarily concerned about price mismatch initiated by political instability, financial meltdown et cetera. Though, these events may create trading opportunities for traders by initiating volatility in asset prices. Their strategies rely on technical analysis.
Now-a-days, trading styles, like day trading and swing trading, are attaining lots of traction.
SHARE THIS POST
Subscribe to:
Post Comments (Atom)
Posts
If 온라인카지노 you adopt a method and it really works}, then it is purely right down to down to} luck and nothing else. All methods may go within the quick term, however in lengthy term|the long run} they all fail. Here are three of one of the best on line casino brands obtainable to players in Malaysia the place have the ability to|you probably can} play stay roulette.
ReplyDelete