BizGuru.me – The investment has become a word that is often heard lately until this second. This is due to the opening of a wide path in the investment. Even if in its time, the investment was not an easy thing. In addition to the investment information that is too low, associated with the difficulty of accessing it for ordinary people.
Fortunately, nowadays, everything can be done easily and quickly so that investing is an activity that many people of old old old old people can have a profit. In addition to investments in stocks, there are also trading terms in stock. Even if they both wear the word “actions”, both activities have quite significant differences.
What are the differences between equity investments and equity trade? The following is a complete explanation of one of the activities of the financial world.
Stock Investing vs Stock Trading
Know the investment in stock
This type of investment is a stock purchase activity and keep them until the asset price increases. In general, equity investors do not think too much about the ups and downs of the value of the actions they own. This is because they assume that the price of the action will increase in time.
When you invest in stocks, the shares held will take place for a long time. These purchased stocks generally have low liquidity with a risk that is not too important. Inventory investments can be carried out by anyone, including ordinary persons. Instead, the commercial stock is generally done by people with a certain profile.
Advantages of investment in stock
- Has a small risk of loss.
- It is passive, so it does not need to be monitored all the time.
- More accurate results in the long term.
- Additional income in the form of dividends of each company.
- Lack of investment in stock
- Takes longer to produce results.
- The return on investment is much smaller than trade.
- The relatively low liquidity of the assets, so that they can not be cashed at any time.
- The amount of profit depends entirely on the company.
- Get to know the stock trade
- As explained above, the exchanges carried out by people with a certain profile.
The reason is the following: the trading stock must be done by people familiar with the world of stocks. A trader is often a person who is entirely dedicated to buying and selling stocks for short-term gain.
Unlike equity investors, it is radiate will win the actions purchased within a short time, ranging from a few hours to 1 week depending on the fluctuation of the course of action.
In addition to the dedication of time, the strategies and analysis used are certainly more complicated. Indeed, stock prices are strongly influenced by global policy and the economy – traders must therefore keep abreast of political and economic developments.
Also Read: Stock Investment Guide for Beginners
- The possibility of making a great profit.
- Income is visible in a relatively short period.
- It is possible to buy and sell actions and remove shares at any time.
- The greater the risk, the greater the gain.
- Disadvantages of share exchanges
- Greater risk of loss.
- Requires a time investment.
- Requires appropriate analytical skills.
- Obligate traders to keep abreast of political and economic developments.
Hope this explanation helps you understand the difference between investment in stock and trade of shares. Of course, everyone has a different risk profile, make sure you do not choose the wrong choice between investment or trading stocks.