If you are just getting into the stock market for the first time, it can sometimes be difficult to navigate a few of the more complex terms and ideas. For example, what is share trading? Is it the same as share investing? Believe it or not, there is a marked difference between the two.
Before you really start getting into the markets, it’s worth looking into stock tips and recommendations. The Bull is a great resource for ongoing shifts in the market, so do make sure to bookmark it for future knowledge.
For now, however, let’s consider the major differences between trading and investing.
What is share trading?
Share trading is all about taking advantage of short-term success. This means that instead of looking at the bigger picture or long-term growth, you pivot your portfolio to look for quick, sustainable wins. Many people who trade in cryptocurrency, for example, will look at trading because of the sheer volatility.
In some ways, share trading could be riskier than investing. Trading means you are going to need to look carefully at mistakes or missteps in the market itself. That also means you are going to need a clear plan for when you get into the market, and for when you want to get out.
Day trading is a great example of a very short-term trading technique that allows you to scalp a big win. However, many people prefer to look at a longer-term approach for sustainable money.
What is share investing?
As you may expect, share investing is the opposite to the above. This form of market analysis takes place when you want to put your money into a stock for the long haul.
Instead of chasing small wins and taking advantage of market mishaps, investors look for ways to build wealth and grow their portfolios. Of course, this does mean finding stock that you can be confident in. That is not always easy!
However, many people view stock investing as more sustainable than share trading, and what’s more, it may be a good way to set up passive income for years to come. If you intend to grab big wins sporadically, a short-term trading approach is more likely to fit your needs.
Which is best for you?
It’s entirely possible to interact with the markets through trading and investing simultaneously. However, it’s not always the best idea. Many experts will tell you to be careful with your market plans, simply because it’s a complex, ever-changing world out there!
Therefore, consider what you really want from your money. Do you want to build a retirement fund? Or are you looking to make big money to use on assets right away?
There are no right or wrong ways to tackle the markets. There’s a reason why there are still so many investors and so many traders out there. Why not take a look at what experts have to say and find your own comfortable route forward?
