business-2089530_960_720

Investing Character: Either a Trader, an Investor, or a Little of Bot

Investing Character: Either a Trader, an Investor, or a Little of BotEarly on in your investment journey you will quickly discover whether you are an investor or a trader. Odds are you are a bit of both. You might be wondering what is the difference? The science part would be the mathematics behind the markets like finance and accounting. The artwork is the ability to recognize a fantastic investment and value.

As someone new to purchasing and selling shares, you need to research yourself as an investor as far as you are studying the companies you are trying to invest in. And how can you do this? I’d encourage you to maintain an investing journal for some time in the beginning and write on every stock you buy or sell. This can allow you to build that art form in investing.

To put it simply, a trader is someone who’s looking to purchase a stock and sell it quickly for a profit. This could be for a massive profit or a small gain, but in any event, they are not holding the inventory that long. What’s more, a dealer might not really put that much time into researching the company, its business, the corporation’s products, or even the financial health of the business. They mostly care about the purchase price movement and the routines in the stock graphs from the price movements of the inventory. This is what is called charting. You simply focus on patterns in the graphs to make a buy or sell decision. Some dealers use this a lot, some do not, but all traders want to get in and out of a stock much faster than an investor.

Investors do not care if aInvestors do not care if a business has a bad quarter business has a bad quarter or when the business is hoping to change some things. In actuality, some investors enjoy it if the stock comes down in price so that they can even purchase more! This is absolutely a longer-term ballgame and requires more patience, but over time, it can be quite profitable. Basic economics imply that markets grow over time. Therefore, a corporation’s stock price will rise over time, at least for great businesses. Consequently, if you purchase shares in good companies and hold them over time, all things equal, their stocks will rise in value and you’ll earn money.

I love to find good companies whose company I can understand, perhaps companies whose products I use, and businesses that have little likelihood of moving out of business. Then I like to develop a large amount of shares in that business over an extended time period.

YOU CAN DO THIS THROUGH Various Ways

  1. You can purchase a few shares each pay check.
  2. Use a portion of your bonus annually (if you get one) towards purchasing more shares.
  3. Make part of your budget a stock purchasing program and buy a specific quantity of stocks each month (this is also known as dollar cost averaging).

What I’d suggest you do is pick two shares, you wish to exchange and one you wish to invest in. For the one you wish to put money into, set a target to have bought a certain quantity of shares by a specific date and then make it happen.

For the stock you wish to exchange, because this inherently is more insecure, make certain in the beginning you find a cheaper inventory that has enough volatility throughout the day which you can purchase low one day and market higher that exact same day or the next to get a profit. This will let you taste both methods to play the game and determine which sort of investing you naturally gravitate towards.

Obviously you may gravitate towards wanting to be a dealer because money could be made a little faster. But allow me to caution you in stating being right one time on a trade does not always mean you’ll be again on a totally different trade. This is to say, you might earn money one time around, but this will not necessarily be true. With purchasing stocks of good companies, they will almost always rise in value over time as they continue to grow and become better businesses in their respective industry.

KEY TAKEAWAY: Being a dealer or investor or a little of both are only two unique ways to purchase and sell stocks and both have their advantages and disadvantages. Attempting both will teach you a good deal about the industry and also about yourself and how to react to stocks moving up or down in value.

ACTION STEP: Go pick out the stocks that you need to invest in and set a target to have X number of stocks by Y date. Also discover the stock you would like to give a try trading and work out how many shares you will need to buy to earn a profit on any appreciation in value which eclipses your commission (see chapter 8).

Share this post

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on print
Share on email
Close Menu
×
×

Cart