Well, it could be taboo to you but investing and trading are quite a big industry. In fact, some of you might associate investing and trading with scams and other heinous crimes.
Take that stigma away and consider it again after reading this article.
From an economist’s perspective, investments are purchased good which aren’t consumed today but rather in the future to earn.
While in the finance industry, investments are monetary assets that are purchased now with the mindset that the chosen asset will earn income in the near- or long-term future. Such assets are meant to be sold at a significantly higher price to make a profit.
Generally, these are some of the types of investments:
- Stocks
- Bonds
- ETFs
- Commodities
- Real Estates
- Mutual Funds
Now, the difference between trading and investing is how they sell the assets. Traders hop in and out of their chosen stocks within weeks or days or hours or even minutes.
Trading aims to make a profit in a short amount of time. Technically, traders rely on the technical factors of the assets such as stocks and forex.
In essence, traders are focused on which direction the pair or the stock will move and are concerned about how they can make a profit from that move.
And unlike traders, investors have a longer-term outlook and prospect for their chosen asset. Investors consider the years and often hold the asset through the market despite the major ups and downs.
The key difference between the two are timing. However, they both share the common goal of earning a profit.
How to Invest Wisely?
In a study conducted in the United States, it was found investing makes more profit than simply putting your funds into traditional savings account at your bank. Meaning to say that keeping it in cash or other forms of saving money.
Here are some of the tips from professionals in the field:
First, you need to create your investment plan for your holdings, may it be for buying, selling, and rebalancing. Some people forget to consider this as it may sound simple and already a given. However, being organized and having a concrete plan helps you navigate through what you want.
Although, we never know when a black swan will come and stir everything. Thus, it is vital to have a plan that suits your goals.
The second is to prepare for the long game. It’s going to be a really rough ride considering the ever-so-changing mood of the market. Aside from that, trends and other hype can affect the asset, but good investors know how to calculate properly for the long haul.
In investing, you will need a ton of patience, analytical skills, critical thinking, and discipline to keep up with the rollercoaster ride of the market.
Third, find a reliable adviser or educational platform that can help you grow and learn the financial world inside out. It’s a must that you know every technical term and know how to analyze fundamentals.
Having a great mentor or guide can help you make or break it in this industry, as there is a lot to be learned. And to be frank, the experience is always one of the best teachers.
Fourth, find the perfect broker or brokerage that will fit all your needs. Everyone investor has his/her own goal, and to reach that goal, it’s important to have the best of the best helping you.
Remember to examine the credibility of that broker or brokerage because there are a lot of scams and fakes in the financial world.
And lastly, always be up to date with the latest and freshest news. Keep yourself well-informed of the events and happenings inside and outside of the market.
Final Tips
Reading regularly and staying up to date with what’s going around can help you navigate through the market.
Try Finance Brokerage, there you can access unlimited news and information; from stocks to forex to commodities to the economy. You can also learn more from the vast array of educational articles that can appeal to those ranging from beginners to pros.