There are loads of different strategies when it comes to investing in the stockmarket but generally the two main ones are investing over the long term or the short term.
Long term investing is usually defined as holding shares in a company for one year or more, whereas short term could mean anywhere from three or four months to a few hours. Personally I’ve never day traded and most of my short term investment holdings were over a period of weeks or months (not days) but that is because I’m a huge chicken and like my companies to be a little bit more stable than those that are chosen for day trading.
Who Makes More Money – Long Term or Short Term Investors?
There are plenty of investors who will say that you make more money by holding over the long term and equally just as many that tell you that short term is the most profitable way to trade.
Personally I think you can make money with both methods, and whichever one you choose really comes down to personal preference and the style of investing that you like best.
If you prefer to watch the stock price every day for the smallest of movements then perhaps short term investing is best for you, but if you would rather leave them and forget about it while you get busy with other things then long term investing might be your cup of tea.
I include strategies for both methods in my book Shopping for Shares because I’ve used both and while I might ever so slightly prefer long term investing, have made money using both methods.
I have to admit that short term investing IS more fun. It can be a thrilling ride to watch the share price jump and wiggle all over the place – but it isn’t for the faint hearted. If you tend to panic if your company falls a few points then maybe you should stick with the nice safe method of long term investing.
Really when it comes down to it – it’s good money management techniques, like what your plan is if the share price rises or falls, that will determine your profit in the market and not so much which strategy that you choose.
And anyway – who said that you have to choose one or the other – you can always do both at the same time if you want.
