The stock market has two sections which include secondary and primary market. In the secondary market, the participants are usually classified as investors, traders and speculators. On the other hand in the primary market trading is performed by traders with the main intent of earning money. Before entering into the stock market or investing in it becomes very important to understand about trading and investment in depth.
Staale Fossberg points out the variation that trading and investment displays
Investing is basically a long-term process that helps in building wealth gradually, while on the other hand, trading is focused on buying and selling within the short span of time. Staale Fossberg, the CEO of MPT or My Private Trade says that trading is a more antagonistic than investing. Traders have to make profitable returns in a specific time so they use special strategies and tools. Mentioned below are the common variances that can be seen between trading & investment:
- The major variance that a trading and investment share is the time period. For instance, trading is a procedure of holding stocks for a shorter period of time which can be for a week or a day. While on the other hand, investment is completely different. Investing is an approach that works on buy and hold standard. Investors invest their money for few years, decades and it can also be for a longer time period. Short term market variations are irrelevant in the long running investing method.
- Even though trading and investing both involve risk on the capital but as per Staale trading comparatively includes increased risk and increased potential returns as the price may go high or low in a smaller time span. He further stated that investment involves reasonably lesser risk and lesser income in a short span but may offer better profits by dividends and compounding interests in case held for an extensive time frame.
- Traders usually focus at the price movement of stocks within the market. In case the price goes higher, traders may sell the stocks. However, on the other hand investment involves making wealth by compounding interest and dividend over a longer period of time.
Staale says that it is okay to be either an investor or a trader; however, one should not try to be both with the same stock. This is because trading is more about everyday trends in the market, while on the other hand, investing is related to the long-term profitability prospective of the scheme or plan.
Before his stint as the CEO and of creator My Private Trade, Staale Fossberg has been working as the company director for a large number of companies, such as Jungle Norway Limited, Conecto Invest Limited, and Superdobro LTD. With the help of Mr. Fossberg, My Private Trade inspires its affiliates to believe that they can produce income by being good salespeople and networkers, and that they can be part of the world’s chief marketplace.