#21 - How to choose between trading or investing?

𝐓𝐡𝐞 𝐛𝐢𝐠𝐠𝐞𝐬𝐭 𝐦𝐢𝐬𝐭𝐚𝐤𝐞 𝐟𝐨𝐫 𝐭𝐫𝐚𝐝𝐞𝐫 𝐢𝐬 𝐭𝐨 𝐛𝐮𝐲 𝐬𝐨𝐦𝐞𝐭𝐡𝐢𝐧𝐠 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐡𝐨𝐩𝐞 𝐭𝐨 𝐬𝐞𝐥𝐥 𝐢𝐭 𝐥𝐚𝐭𝐞𝐫, 𝐛𝐮𝐭 𝐭𝐡𝐞𝐧 𝐭𝐡𝐞 𝐚𝐬𝐬𝐞𝐭 𝐝𝐞𝐜𝐥𝐢𝐧𝐞𝐬 𝐢𝐧 𝐩𝐫𝐢𝐜𝐞, 𝐚𝐧𝐝 𝐢𝐧𝐬𝐭𝐞𝐚𝐝 𝐨𝐟 𝐬𝐞𝐥𝐥𝐢𝐧𝐠 𝐢𝐭 𝐰𝐢𝐭𝐡 𝐚 𝐥𝐨𝐬𝐬, 𝐭𝐡𝐞 𝐭𝐫𝐚𝐝𝐞𝐫 𝐬𝐭𝐚𝐫𝐭𝐬 𝐭𝐨 𝐡𝐨𝐥𝐝 𝐨𝐧 𝐭𝐨 𝐭𝐡𝐞 𝐥𝐨𝐬𝐬𝐞𝐬 and tell himself “I’m investing in this asset now, the price will go back later”!😱😱😱⁣
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𝐒𝐨 𝐭𝐡𝐞 “𝐢𝐧𝐯𝐞𝐬𝐭𝐢𝐧𝐠” 𝐢𝐬 𝐞𝐬𝐬𝐞𝐧𝐭𝐢𝐚𝐥𝐥𝐲 𝐭𝐡𝐞 𝐝𝐞𝐧𝐢𝐚𝐥 𝐨𝐟 𝐧𝐨𝐭 𝐰𝐚𝐧𝐭𝐢𝐧𝐠 𝐭𝐨 𝐭𝐚𝐤𝐞 𝐚 𝐥𝐨𝐬𝐬!  🙀⁣

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Vise-versa, an investor can buy a stock for the purpose of collecting dividends, but then he starts to check the charts and news every single day and sell it as soon as he makes a small profit - and only to regret years later when the stock triple the price.   😭 😭 😭⁣
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Yes, I’ve personally made the above mistakes many times in my career as a trader and investor.  😅😅😅⁣
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Often, we’re confused with these two terms, trading and investing, and we though trading is about short-term, so we can just buying whatever, as long as we can sell it later. 😰😰😰⁣
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And then we thought to invest is about long-term, so we buy something and never look at it again. ⁣
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You can always buy Apple at $300 now and wait for it to drop to $200 and still tell yourself that you’re “investing”….🤨🤨🤨⁣
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Or ⁣
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You can buy a penny stock that you know nothing about and tell yourself that you’re “trading,” so it doesn’t matter…🙄🙄🙄⁣
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I think instead of focusing on the difference between trading or investing; you should focus on the golden truth of finance:⁣
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𝟏. 𝐊𝐧𝐨𝐰 𝐲𝐨𝐮𝐫 𝐫𝐢𝐬𝐤⁣
𝟐. 𝐇𝐚𝐯𝐞 𝐚 𝐩𝐥𝐚𝐧⁣
𝟑. 𝐊𝐧𝐨𝐰 𝐰𝐡𝐚𝐭 𝐲𝐨𝐮’𝐫𝐞 𝐛𝐮𝐲𝐢𝐧𝐠 𝐚𝐧𝐝 𝐰𝐡𝐲 𝐲𝐨𝐮’𝐫𝐞 𝐛𝐮𝐲𝐢𝐧𝐠⁣
𝟒. 𝐇𝐚𝐯𝐞 𝐚 𝐬𝐭𝐨𝐩 𝐥𝐨𝐬𝐬 ⁣
𝟓. 𝐑𝐞𝐚𝐝, 𝐥𝐞𝐚𝐫𝐧 𝐚𝐧𝐝 𝐞𝐝𝐮𝐜𝐚𝐭𝐞 𝐲𝐨𝐮𝐫𝐬𝐞𝐥𝐟 ⁣
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And that’s it! 👍👍👍⁣
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𝐃𝐨 𝐲𝐨𝐮 𝐜𝐚𝐥𝐥 𝐲𝐨𝐮𝐫𝐬𝐞𝐥𝐟 𝐚 𝐭𝐫𝐚𝐝𝐞𝐫 𝐨𝐫 𝐢𝐧𝐯𝐞𝐬𝐭𝐨𝐫? 𝗪𝐡𝐲?