Sunday, October 19, 2008

Are you a trader (or) investor?

Trading is like hunting & Investing is like harvesting. One fine morning, you can decide to hunt and go out with your spear. If you are lucky, you may come back with a few animals. . However, harvesting is a long process. You have to plough, sow seeds, water the plants and remove the weeds. The returns of harvesting cannot be seen in a day or two. It may take months or years. Patience is the key.

There are lots of differences between 'trading' & 'investing' in stocks. Traders (typically short-term focused) time the market, they act based on news, they don't look at fundamentals of a company. All they look for, is a quick entry and exit. They try to ride through the waves. Investors look at long-term fundamentals of the company. An investor has lots of patience. An investor is more disciplined than a trader. How many 'traders' become famous in history? But, Warren Buffet, a veteran investor is continuing to make his mark.

Are you a trader (or) a investor?

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