Significant Differences between Investing and Trading

Significant Differences between Investing and Trading

Significant Differences between Investing and Trading – For those of you cloud people who are not traders, of course you think all investments are the same, even though there are differences between investing and trading.

Not a few Indonesian people consider investing and trading the same thing. In fact, the two are very different. This difference is not easily understood by beginners in the world of capital markets.

1. The goals of the two are different

The first obvious difference is that while investing is aimed at creating wealth in the long run by buying good companies and holding them for a long time, trading is the exact opposite, aiming to make profits by buying and selling stocks frequently.

2. The time period shows a significant difference

As mentioned earlier, the time period for investing is long term, it can even be several decades. For example, parents who invest in their children or grandchildren. So, later the shares purchased will increase in value to millions. Of course, the selected stock must be healthy from a financial and fundamental perspective.

On the other hand, the trading period is short term. It could be minutes, hours, days, or weeks. In fact, it is sometimes less than a minute when a trader buys or sells a stock with an explosive move and immediately makes a profit.

Also Read:Stock Trading App Suitable For Beginners

3. Has its own charm for investors

The views and behavior of investors in this regard are also different things if you pay attention to them. investors who choose investments with stock instruments tend to be relaxed in buying and selling them, depending on market fluctuations. This is because considering the goal, which is to create wealth in the long term.

However, investors who choose to trade or also called traders, tend to make big profits in a short time. They usually play an active trading game in the market and need time and presence to make a profit.

4. The benefits and protective elements received are different

In investing, investors enjoy facilities such as bonuses, dividends, stock splits, and others. Whereas in trading, traders hold shares only for short intervals and therefore do not enjoy this facility.