This is the difference in stock investment with stock trading
Investment is a word that is often heard at the last few times until this moment. This is due to the opening of the wide road in investment. Even though in its time, investment is not an easy thing. Besides information about too little investment, coupled with the difficulty of access to do it for ordinary people.
Fortunately, at this time, everything can be done easily and quickly so that investment becomes an activity that is carried out by many people from young people to old to be able to benefit.
In addition to stock investment in stock, there is also a stock trading term. Even though they both bring the word “stock”, actually both activities have a significant difference.
What are the differences in stock investment with stock trading? Here’s the full explanation of one of the activities in this financial world.
Get to know a stock investment
This type of investment is an activity to buy shares and save them until the price of the asset rises.
Stock investment actors generally do not think too much about the fall of the value of shares owned. This is because they assume that the stock price will rise again in time.
When investing in shares, shares will be detained for a long time. These buying shares usually have low liquidity with risks that are not too large.
Stock investment can be done by anyone, including ordinary people. Conversely, stock trading is generally carried out by people with certain profiles.
Excess investment stock
- Have a small risk of loss.
- Passive, so it doesn’t need to be monitored at any time.
- More definite long-term results.
- Additional income in the form of dividends from each company.
Lack of stock investment
- It takes a longer time to produce results.
- Investment benefits are much smaller than trading.
- The liquidity of assets is relatively low, so they cannot be disbursed at any time.
- The amount of profit depends entirely on the company.
Get to know stock trading
As described above, trading is carried out by people with certain profiles.
The reason is: stock trading must be carried out by people who already know the ins and outs of the stock world.
A trader is often a fully dedicated person to sell and buy shares for greater short-term profits.
In contrast to stock investors, traders will resell shares purchased in a short period, ranging from hours to 1 week depending on the rise of the stock price.
Apart from time dedication, strategies and analysis used are certainly more complicated. This is due to stock prices which are strongly influenced by the politics and global economy – so traders must continue to follow the development of policy and economics.
Excess trading stock
- Opportunities to get big profits.
- Income is seen in a relatively short period.
- Allows for sale and melting shares at any time.
- The greater the risk, the greater the results.
Lack of stock trading
- Greater risk of loss.
- Need investment time.
- requires the right analytical skills.
- Requires traders to follow political and economic developments.
Hopefully, this explanation helps you understand the difference between a stock investment with stock trading. Of course, everyone has a different risk profile, so make sure you don’t choose between investment or stock trading.
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