Basics of Investing

Posts Tagged ‘investors traders’

There are big differences between investors and traders. Before you start buying stocks or other investments you need to decide if you are an investor or a trader. This investors vs traders decision is paramount because the strategies you use are all dictated by this one decision. So please think about it carefully, as it really will affect all of the investing you do for the rest of your life. It will also dictate which websites you will frequent, so think hard! Just so you’re sure about the terms, below are the definitions of investors and traders.

What are traders?

Traders are those who are more concerned with what they are buying now than following a plan to achieve their goal in the long run. Making short term money guides most of their investing actions. For example, Traders will likely have the following attitudes:

• I like Microsoft and I want some of it.
• Now the market is up, it’s a good time to make money.
• I think this stock/fund is better than that one so I want some.
• Prove to me why I should buy this stock or fund.

What are investors?

An Investor, on the other hand, is someone who is more concerned with achieving long term goals. In most things throughout life they are goal-oriented, and they value safety above the prospect of making profit in the short term. For example, they will have the following attitudes:

• I want to retire in 10 years.
• I have $x to invest now, and I want to have $$x as soon as possible.
• I don’t want to take too much risk.

While these examples are not precisely the difference between conservative and aggressive investors, you can see that the investor is obviously more conservative in his investing mentality. The Trader, on the other hand, looks for safety in other ways, and does best to find the cheapest trading accounts with the lowest overhead, spending much more time doing research for his or her own investments.

Which are you? Which of the two Options above more comfortably fits your lifestyle? You should decide right now, this very instant. Really, before you read another paragraph. I’ve got tools, tips, and investing advice a-plenty for Investors, but Traders won’t find much more help here because the kind of help they need is by finding the lowest-cost-per-trade accounts. I wish I could help more, but Traders don’t need investing advice, they need trading tips and low fees, period. However, If you choose the Investor route, your plan is carefully laid out in 10 precise steps upon the next 10 pages.

Ok, decision time is up. If you chose “trader,” you may exit the website now, there’s not much else here for you.