Investing vs. Trading: What’s the Difference?
“Investing” and “trading” are words often used interchangeably, but when used precisely represent distinct approaches for those in the financial markets.
“For most people in most situations, a long-term, buy-and-hold, diversified, low-cost investment approach is likely more suitable than active trading,” David Tenerelli, certified financial planner at Values Added Financial Planning, told Investopedia. “This is because it helps the investor ignore the ‘noise’ and instead focus on a disciplined approach.”
Meanwhile, traders will attempt to make buy/sell decisions based on stock price movements (technical analysis) or short-term changes in companies’ financial condition (fundamental analysis), he said.
Thus, both investors and…
