which is best trading Vs investing

Trading Vs investing :Hey friends from last few years i have read tons of finance related books and also investments related books , so after reading these many book i came to an conclusion that a long term investing which is called value investing is the best one , to invest the money and to get the long term goals .

But Now a days a trading has become an trending way to get money , were usually people spend a lot of time patience and reading charts and doing technical analysis . I usually avoid this and i use to not recommend to any one also . But recently I have changed my mind set after reading a a book which is called ” THE MAN WHO SOLVED THE MARKET HOW JIM SIMONS LAUNCHED THE QUANT REVOLUTION ” It was very inspiring .

But Now a days as we know trading has become an trending option for the people to get rich and many people are becoming rich and traders as well . Just because of this let’s see which one is the best thing ” TRADING OR INVESTING ” I am going to me my personal opinion at the end of the articel , so just please go through the hole article .

Investing Vs Trading Facts :

I am going to share a interesting facts about the investing Vs trading .so that you can decide your self that which one is better .I am going to share the facts according the the book that I have read which is of ” THE MAN WHO SOLVED THE MARKET HOW JIM SIMONS LAUNCHED THE QUANT REVOLUTION ” and this book is about the JIM SIMONS , who is called the world’s richest mathematician . He has around 2800 crores networth that too in $ . As rich billionaires will own the big corporations like Ambani , Tata , Elon Musk , Jeff Bezos or in other side they will be an investors in big companies . But JIM SIMONS have not done both of these things , he started His career by doing trading . Then by doing trading he made a corporation company , named Renaissance Technologies . He was the first man who have used the computer perfectly for trading just by doing data analyzing . And also he has operated a Hedge Fund , which is named as Medallion Fund . And do you know the track record of the medallion fund is the best in the history ! It has given more than 62% returns every year after deducting all fees and taxes this fund as given more than 37% returns per year .

Infact you know , the track record of simon is more then of Warren Buffet , so it does it mean that you should leave value investing and become a trader ? , No nothing like that . I am going to share the investing things related to this so that will help you understand the perspective of both sides and will help you taking a better decision .

Trading Vs investing| 5 Important Points about the Investing and trading :

I am going to share a 5 important point one by one which is very important for you to understand

• 1.Concept Of Investing And Trading :

The name of the first concept is ” concept of investing and trading “

Let us first discuss about the INVESTING : I we talk about investing , then it is an a long term investing were you can hold the money for long time which is of like for 10 years ,20 yrs, 30 yrs because here you invest money on the business which takes some time to grow . The value of investing stock will increase in day by day . I know there will be an crashes in between but if you observe for the long time then the market always grows up . and this is a big fact . And here you get see the power of compounding effects , your money gets multiplied in long term which make you very rich after a point of time

Let us discuss about the TRADING : Trading is a short term game here you can buy any product like stocks , crypto , assets , options or real estate , so here the thing is that not about it for holding for long time your goal is to make profit just with in a short time . And trading is also very old concept that has been going for thousands of years . simple concept of trading is ” Buy Low and sell high ” . here you can’t invest for long time . And the main thing was you no need to care about the company price , market , value , news , business model etc . people go according to the volume to make profit .

• 2. Difference between the Investor and the trader :

Here the 2nd concept is about the difference between the investor and the trader

To understand the difference between the investor and the trader let us take the example of the people who are in the top position in both areas .

First let us take the example of JIM SIMONS and then we will see Warren Buffet who is called as the world’s best investor . Jim was found of maths since childhood , thats why at the age of 23 simon completed his PHD , he work as a professor in the Harvard university . He started getting bored after a time point Then he got a chance to join in IDA , a government agency , his work is to crack the spy codes of a soviet just by reading random data . he was always dreamed to become rich in the life , then he started showing interest in stock market . he started using all his past knowledge in the stock market . slowly he managed multiple hedge funds one by one his first hedge fund was mona metric . then after he formed a company named Renaissance . Then after by the help of the multiple mathematical rules they started creaking stock market . were he got the huge profits and then he became an billionaire by trading .

let us take the example of the Warren Buffet’s story . He started investing from the age of 11 . and he always focuse on the value investing and he focus on the bussiness on those companies and to invest he used to observe the companies sales , returns , past performance , profits , loss and also future plans . if every thing is fine then he invest in that company and waits for an few years and when the company gets profits , then he lets the money compound , but this was an long term process . and this process will not make you the rich in short time . And these investors have made there billions after the age of 50

And the big difference between the trader and the investor is tax and fees, when an investor invest money and then he holds for a long term so that he gets a lot of tax benefits . he has to pay the tax when he cashes the investment which is hardly of 5-10 % , were has the trader has to trade every day , so very firstly he has to pay the 1-2% brokerage fee and on the every profit he has to pay 10-30% tax according to the trade

• 3.Is it hard to be trader or investor ?

According to the investors and the traders that was have discussed above in this article , The biggest difference between the trader and the investor is that not every one can become a trader , because the people who do trading just after 6 months only 16% of then are profitable and remaining 84% people are profitless . Trading is an profession and it just like a full time job were he can be profitable for some times and loss for some times and it is very risky and also rewardable

When coming to the investment , there is low risk in investing and it is slow process , but it can make you the billionaire overnight or it takes some time . but you get 8-12 % annual returns in investing but its not so easy , because reward always comes with risk in stock market .

• 4. Fundamentals of trading and Investing :

The difference between investing and trading is , In investing we have to do the fundamental analysis of the company which are like annual reports , team , vision and every little thing about the company then after we will be knowing about the company details ,. Just by doing the fundamental analysis only people will invest .

But were has trading is totally different from the investing , trading is totally depends on the technical analysis here we can pick any company no matter what its name is , but we have to focus on some things like candle charts mainly we have to fallow the market news and should have to predict that whether the stock will go upwards and downwards which is totally depends on the graphs . And many people will do trading just by guessing , so that there will be a 50% change of getting right or wrong . guessing works only for the experts for sometime . so this is very important thing to understand this also

• 5. Which one is best for you ? :

Whatever I have Reviewed in this article i have tried to give you all true facts . To get the right decision just start questioning to your self .

1. firstly what is your end goal ?
2. how much money do you want to make in what time ?
3. How focused and discipline are you in stock market ?
4. what about your financial situation ?

etc like these just question your self then slowly you can understand by your self . But from my end I just want to explain that trading and investing both are connected to each other but both are completely different , both are dependent on the market its self , one is like full time job and other is like low risk and more time .

My personal opinion is when a person runs behind making money quickly he losses the money as of may times . if you think that you can become rich by just doing trading I think it is very difficult to do . But instead of trading you can go with the long term investor . First you have to start earning from the side business then after invest in the stock market . And here you to declare that it is completely my personal opinion , i am not forcing anyone one to do the same .