A Conversation & Outcome : I Am An Investor!

A simple conversation can open a vast sphere of discussion. I was in middle of one such discussion over crypto portfolio with one of my well wisher. I casually asked the other to give some option for trading and he promptly replies "he is not into trading" though his pick of crypto always fetch you a good return. When i confronted with his value of crypto list ,he replied "he is into investments"

Though I mean to be same (doing investments), but a little lack of understanding lead me to get into a deep drill down on both topic. What I assume to be similar are actually different.

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Investing and trading are two different mechanisms employed to make a profit in the financial markets. However, someone who is relatively inexperienced and new to the financial market be it crypto or stocks, in reality the two are far from being similar.

Investing is traditionally *related to buying crypto/stocks or other financial instruments that are expected to fetch returns over a long period of time. it requires to do a through study of market and the projects. An investor patiently wait till the stock reaches its potential.

Whereas, Trading is characteristically associated with buying and selling stocks, coins, commodities, currencies, bonds or other financial instruments over shorter periods. It is like flowing with the market flow. A trader buy and sell fast to hit the higher profits in the market

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Drilling deep down on both the topic, lead me to discover following points on the basis of which it would be easier for anyone to differentiate the two topic.

• Period : Period is main criteria that define the two topic. Trading is a method of holding stocks for a short period of time. It could be for a week or more often a day. Investing is to invest t money for some years, decades or for even longer period. Short term market fluctuations are insignificant to the investors.

• Risk : The theory of No Risk No gain simply outlined here. Trading comparatively involves higher risk and higher returns die to price fluctuation. Investing guaranteed a solid return. It deliver higher returns by compounding interests and dividends if held for a longer period of time.

• Art vs Skill : Investing is an art. It require market study as well as analyzing the project on which they are investing. On the other hand, Trading is pure form of understanding the psychology of market. It require a high level.of Skill, to learn market trends to hit higher profits in the stipulated time.

After, analyzing the fact sheet of both topic, I felt relived. Infact it was the wrong choice of word during the conversation that lead me to get so deep on the topic. Investing in crypto is all about HODL, if one wants to earn quick profits then definately they look out for the opportunities to book their profit in shorter time.

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Finally, to make it clear,
I am not a traders, I am an Investor.!

Peace

Namaste @steemflow

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