facebookWhat is the difference in Trading vs Investments? As in the difference in holding a stock and sell later vs trading a stock. In trading, do I actually buy a stock? - Seedly

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What is the difference in Trading vs Investments? As in the difference in holding a stock and sell later vs trading a stock. In trading, do I actually buy a stock?

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The major difference that makes sense in trading and investing is investing involves buying and holding stocks for a longer period to get benefit from growth and dividends. Here usually you aim for building wealth over time. Trading means buying and selling stocks within a short period of time to get profit from price fluctuations. Here the goal is to get quick gains over days, weeks or months.

Yes, in trading you actually buy stock, but the thing is it's typically held for a shorter period of time as compared to investing.

One is short term n the other is long term

Investment is for divident (income) or capital appreciation (growth), thus its focus is fundamentals and mid-long term.

Trading is for PL between buying/selling for short term hold (could be minutes to hours to days), thus its focus is on TA, hypes, and behaviourial science.

I would say there are two factors that would determine whether you coin it as trading or investment: a) objective, and b) time horizon.

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If your objective is "fast money" = trading, but if your objective is to save for retirement = investment.

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Trading is just a term; buying and selling of financial securities. So you do need to buy a stock. In fact, you can also buy currencies.

Make sure you do not buy something intending to sell off in a few days later and price keep dropping...

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