The Long Debate: Short-Term Trading Or Long-Term Investment?
For decades, successful traders and investors have hailed the financial markets while also being criticized by people who received the short end of the stick. Although the graph of enthusiasts who open demat account has been increasing daily, most of them find themselves in a muddle while building their portfolios. The primary barrier that circles the segment of financial markets is the lack of awareness among the people, which has led many to get involved in hasty and worthless investments, thereby rattling their faith in these markets.
Amongst these uncertainties, there has been a rise of several trading app that focus on providing a seamless experience to users who yearn to understand the mechanism of trading and investing in financial markets to build a rewarding portfolio. However, should an individual engage in short-term trading and instruments? Or choose the less-risky route of investing on a long-term basis? There has always been a variation in the answer, where the markets bestow the results in the hands of the traders and investors themselves, as per their perception.
Short Term Vs. Long Term
To invest in stock market is now a child’s play owing to the easy navigation and advanced features provided by several trading applications. However, the crucial stage arrives while making investment choices and deciding on a game plan. A few of the significant factors necessary to consider while allying yourself with short-term or long-term approaches are as follows.
- Objective
The need for finance differs for every person who invests in the financial markets. While some desire to access quick funds, others prefer to invest a part of their income monthly and utilize all of it after a certain period. Investment decisions should be made per one’s objectives and goals, resulting in unwavering actions after buying or investing in any financial segment. As per studies, even successful trade and financial decisions have proven fatal due to an investor’s lack of patience or hesitation over the trade they executed.
- Fundamental and Technical Analysis
Fundamental and technical analyses are considered the top-notch approach toward a successful investment. Research has been easier with the premium features proffered by investment apps. Those investors inclined toward fundamental analysis are known to believe in long-term investments. On the other hand, individuals who favor studying the charts and doing technical analysis prefer short-term trading.
- Assets
The most common misconception among new traders and onlookers is that investments are encircled around the stock market. With the advent of technology and digitalization, an individual investor can make successful investments even in other segments, such as forex, commodity trading, etc. The type and quantity of investment also play a decisive role in choosing an individual’s investment strategy and route.
Conclusion
To surmise all of the above, there has never been any conclusive answer to the right investment approach, as there is no wrong approach. The tides are of equal weightage on both sides, and the success or failure of every investment decision depends heavily on an individual’s principles, objectives, and patience.
