The Difference Between Investing and Trading

Investing and Trading are not the same thing. The returns you seek, the length of time it takes to achieve those returns, the amount of risk one is prepared to take, and the commitment one can make to monitor the investments dictate the strategy of whether to invest or trade.

Investing

Investing is holding an asset for a longer term, expecting it to increase in value. The most common example is investing in equity mutual funds through a retirement plan. Many of these funds are held for years and are expected to show a substantial appreciation over the long term.

You can also invest in individual stocks and hold them for 6 to 18 months or longer, sometimes much longer. This is referred to as the "buy and hold" strategy.

Real estate would be another example of investing, unless the property is purchased for quick flipping.

Jewelry, art, stamps, and collectibles are still other examples of investing where they are kept for a long time in the hope their value appreciates.

Trading

Trading is also investing but the time frame for a return on that investment is a much shorter period, usually a matter of a few days or weeks.

The most obvious example would be day trading where a trader is in and out of a market the same day.

Still other trading takes place over a period from a few days to a few weeks.

Most trading takes place with individual stocks and commodities, with commodity markets being the most predominant vehicle.

Rob Hall is a successful futures trader, President & CEO of his own investment firm,and international author. His books on learning to trade futures markets are distributed through Sumas International Sales Ltd. View them at http://www.futuresopps.com/Comm.htm

---

Consolidation Period

The economic data reported Fri showed continued above trend growth... Read More

How to Terror-Proof Your Money

"To drift is to be in hell, to be in... Read More

Beta Factors: How They Can Be Used In The Current Situation

Ever since the turn of the century, world stock markets... Read More

Rules for Simplified Employee Pension Plans better known as a SEP Plans

A SEP is a special type of IRA. Under a... Read More

The Perfect Mutual Fund

The Perfect Mutual Fund is the one you build yourself!The... Read More

Numismatics are for Collectors, Not Investors

As a precious metals investor, you may heard much about... Read More

IF - The Wonders of Investing

If it seems... Read More

Makin The Sauce

Let's face it, you're on a roll. After getting down... Read More

The American Age of Inflation is Over

"The American Age of Inflation is finished." So says economist... Read More

Rolling your 401k: Contributory IRA vs. Rollover IRA

In an ideal world you would start your working career... Read More

Wit and Wisdom on Money, Wall Street and Success - Part #2

Here are ten more WISDOM packed GEMS that ooffer very... Read More

Economic Survival in the 21st Century - the Three Key Questions to Ask

In this "special report", I want to pose a few... Read More

What If You Absolutely Positively Could Not Lose - Would You Play the Stock Market?

Seniors on fixed incomes face a unique problem. Where do... Read More

Invest or be Pink Slipped

Firing an employee seems to be easier and easier for... Read More

Short Selling for Investors

Shorts. Let's see. If there are shorts there must be... Read More

The Economy Is Not The Stock Market

Several days ago, the Commerce Department reported that May's factory... Read More

Press Release Scams and Successes: Reading Between the Lines

Press releases are a means through which companies can keep... Read More

Part II of Day Traders and Swing Traders and Options? Maybe!

Before every protective put trade it is possible to calculate... Read More

Caveat Emptor: You May Owe Taxes Despite 401(K) Losses!

One among many ways you lose money in non-indexed mutual... Read More

Help with My Annuity

The cries are heard from the distance, "I need help... Read More

Rules of Simple IRA Your Business Needs to Know

A Savings Incentive Match Plan for Employees plan, better known... Read More

Better Investing Made Easy

If there were one piece of advice that an investor... Read More

The Biggest Oil Opportunity in the World ? And How You Can Profit From It

Where is the second biggest deposit of oil reserves in... Read More

An Introduction to Offshore Investing

Once upon a time, offshore investment strategies were spoken of... Read More

Making Your Investment Dollars Work for You

Investments are scary for some people, especially those who have... Read More