AS SOON AS YOU DECIDE TO START INVESTING, IMMEDIATELY DECIDE WHAT YOU WILL DO – INVESTMENTS OR SPECULATION
In the securities market, it is traditionally customary to distinguish two types of participants depending on the timing and methods of investment: medium-term/long-term and short-term investors, they are also conservatives and speculators. Their tactics, risk attitude and involvement in the process are radically different. Therefore, as soon as you decide to start investing, immediately decide what you will do — investments or speculation. These are two completely different things.
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A short-term investor or speculator is distinguished by:
- Short investment period (from an hour to several weeks)
- High trading activity (frequency and number of transactions)
- Great attention is paid to technical analysis of stock movements
- Frequent use of margin lending
- Online monitoring of news
The constant execution of speculative transactions requires a lot of time. In addition, a speculator must have a high level of knowledge in the field of the stock market and a stable psyche. In the absolute majority of cases, a simple person who has never encountered an exchange will not be able to show a stable result without going a long distance. Without knowledge, training and experience, your money will sooner or later flow into the pockets of other, more successful market participants.
Characteristic features of medium-term and long-term investors are a long investment period (months, years), low involvement in the trading process, active use of fundamental stock analysis, priority is given to a risk-balanced and profitability investment portfolio, rare use of borrowed funds, rarely reads the news of financial markets, is less exposed to risk.
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