What is Investing?
Investing is the purchasing of stock in what you believe to be solid companies in an effort to make money in the longer term.
Investing will typically consist of holding a companies stock over the time frame of one year or more. The goal is to buy stock in great companies that are at a discounted price.
Company fundamentals such as earnings are very important. Are revenues and profit increasing and is there growth?
Investing is less stressful than day or swing trading as you do not have to worry as much about day-to-day volatility.
Timing is very important as markets can drop quickly with negative catalysts.
Strong management is one of the biggest factors of a great company. It's all about honest and ethical leadership.
Does the sector (industry) have potential for growth in the future or is it dying? (i.e. Artificial Intelligence or Shopping Malls)
"Be fearful when others are greedy and greedy when others are fearful." - Warren Buffett
PROS:
Taxes are based on capital gains and much lower (around 10-15%).
Commissions will be lower than day trading.
Stocks tend to rise over time (although there will be bear markets).
The government, Federal Reserve, and corporations are one your side (they all typically want stocks up).
You can worry less about daily manipulation by high frequency traders and market makers.
A lot of money can be made if you know what you are doing.
You can invest from anywhere in the world.
CONS:
It can require great patience and willingness to avoid selling in down markets.
There can be unforeseen catalysts that can knock down stock prices unreasonably.
Politics can have a big effect on the market and therefore your stock.
The stock market can be bipolar and have wild swings over the years.
It takes a lot of hard-work and effort to become savvy and educated.
There is a lot of false information to sift through on the Internet.
Investing will typically consist of holding a companies stock over the time frame of one year or more. The goal is to buy stock in great companies that are at a discounted price.
Company fundamentals such as earnings are very important. Are revenues and profit increasing and is there growth?
Investing is less stressful than day or swing trading as you do not have to worry as much about day-to-day volatility.
Timing is very important as markets can drop quickly with negative catalysts.
Strong management is one of the biggest factors of a great company. It's all about honest and ethical leadership.
Does the sector (industry) have potential for growth in the future or is it dying? (i.e. Artificial Intelligence or Shopping Malls)
"Be fearful when others are greedy and greedy when others are fearful." - Warren Buffett
PROS:
Taxes are based on capital gains and much lower (around 10-15%).
Commissions will be lower than day trading.
Stocks tend to rise over time (although there will be bear markets).
The government, Federal Reserve, and corporations are one your side (they all typically want stocks up).
You can worry less about daily manipulation by high frequency traders and market makers.
A lot of money can be made if you know what you are doing.
You can invest from anywhere in the world.
CONS:
It can require great patience and willingness to avoid selling in down markets.
There can be unforeseen catalysts that can knock down stock prices unreasonably.
Politics can have a big effect on the market and therefore your stock.
The stock market can be bipolar and have wild swings over the years.
It takes a lot of hard-work and effort to become savvy and educated.
There is a lot of false information to sift through on the Internet.