Long-Term Stock Investment vs. Short-Term Trading
When you make a purchase of a long-term stock you should be careful with the amount you pay for the stock. Otherwise, it may cost you more than you could possibly save.
When you decide on the purchase of a particular stock you should consider whether it is not overvalued. If it is overvalued, over the long-term you may not be able to observe growth in the values of the stock.
On the other hand, if you are firmly sure that the stock has great long-term potential and its current price is beneficial, there is no point to make schemes for saving a few pennies.
Long-Term Stock Purchasing
Investors aim at purchasing a stock at a level as low as possible. In this way they ensure themselves to a certain degree a wider room for growth.
For instance, John has decided to purchase a particular stock. Its current price per share is quite beneficial and the predictions over its future growth are promising. However, John decides that the current price per share may drop further so that he can save some money and thus increase his profit.
Unfortunately, the price starts to rise gradually. As a result, John loses the previously beneficial price. He wanted to save some pennies, but instead he lost them.
As it can be seen, it is sometimes better to take advantage of the current situation and not risk losing it, because the dynamics of the stock market have proven that there is nothing sure.
Short-Term Stock Purchasing
Traders in contrast to investors make their profits from maneuvering between today's and tomorrow's prices. They should know when it is time to buy and when to sell, because their profits depend on this.
Most traders avoid purchasing stocks that have already been announced to the general public through the media. This is so since everyone knows about them and the profits will be sufficiently lower. Nevertheless, many beginner traders trade with stocks that have already moved on the news.
Experienced traders manage to make a reasonable evaluation of the state of stocks. On the basis of these judgments they decide whether it is worth purchasing the stock or not. If it is not they turn their attention to the next deal.
Finally, if you a long-term investor you should not pay attention to the pennies you can save from purchasing a particular stock, because over the long-term these pennies will be of no difference. However, if you are trader interested in quick profit making every penny should matter.
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- The Long-Term Scope of Stocks
- Investing According to Dow Jones Industrial Average
- Allocating for Investing Purposes
- Stock Trader vs Company Investor
- When to Buy and Sell Stocks
- Before You Buy Stocks
- Bull and Bear Market Strategies
- Electronic Trading vs Stock Exchange Trading Floor
- Stock Market Prices and Buying Strategies
- Personal Reasons for Selling Stocks
- When to Sell a Stock
- Beating the Market Strategy
- Direct Stock Purchase Options
- Stock Portfolio Diversification
- Dogs of the Dow Investment Strategy
- Purchasing Your Company’s Stock
- DRP Types and Benefits
- Dogs of the Dow Performance
- Investment Strategy Types
- Common Stock Investing Strategies
- The Warren Buffett Way - Principals for Successful Investment
- Value Investing Basics
- Has the Time for Selling Stocks Come
- Selecting Your Investing Strategy
- Dollar Cost Averaging Benefits
- Determining the Number of Stocks to be Included in Your Portfolio
- Ex-Dividend Date - Why It Matters
- Constructing a Successful Stock Purchase Plan
- Understanding After-Hours Trading
- Strategies to Deal with a Down Market
- Stock Market Day Trading
- Strategies to Deal with a Weak US Dollar
- Buying Stock on Margin
- Stock Price Forecast
- Stock Option Strategies
- SEC Order-Handling Rules
- Stock Portfolio Balance Maintenance Techniques
- Short Interest Ratio Monitoring
- Holding Your Securities: Physical Certificate
- Holding Your Securities: Street Name Registration
- Holding Your Securities: Direct Registration
- Management of Investment Decisions Through Stock Screens
- Direct Stock Purchase Plans
- Down Market and Discounted Stock Opportunities
- What Investors Need to Know about After-Hours Trading
- When to Apply Averaging Down
- What Investors Need to Know about Auto-Trading Programs
- Financial Analysts: NYSE and NSAD Rules and Disclosures
- Insider Trading Tracking
- Asset Allocation – Choosing the Best Allocation Strategy
- Investing in Equity-Indexed Annuities Explained
- The Pros and Cons of Exchange-Traded Funds
- Prepaid Tuition Plans versus College Savings Plans
- Characteristics of Variable Annuity Products
- Diversification of Assets
- Rebalancing Your Assets
- Cross-Market Trading Circuit Breakers
- Margin Requirements for Pattern Day Traders