Investor or Trader

Should I be a investor or trader? The follow will point out a few differences between the two. A trader will have to dedicate more time to the activity of trading. Investors will need to spend more time looking over company financial data.

Investing

Investing requires complete and thorough evaluation. Before I invest I will develop a strong opinion about the stock then I follow it with and investment. A stock can be held for years and years this requires a look in time out to the future.

Some of the things considered when investing are the balance sheet, debt, growth multiples,  earnings and its growth rate, safety, and more.  Take time and evaluate the strength of a company before buying any investment.  Unless something in the company drastically changes investors will be willing to hold during good times and bad times. 

Trading

Knowing what a stock even does is not needed for a trader to be able to take a trade.  Stocks do not need to only go up a trader can make money in a down move also.  Place trades using information gathered from looking at the chart, not the financial statements.

Traders cut losing trades fast and hold onto winning trades, they are like fair-weather friends.   Price movement is what is needed not good earnings. 

Summary

Investors look for underpriced value, where a trader looks for a price action that looks mispriced. Trader looks for a position to last a few days to a hour in the case of a day trader. Investors look to buy a stock low in price and let it gain in value over many years.