Is it better to be a buy and hold investor or a trader?

Jeremy

Member
May 31, 2022
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You're probably used to hearing that the best way to invest is to pick one stock, hold it forever, and never look back. But what if you could make money without doing any of that?
Is it better to be a buy-and-hold investor or a trader?
 

Maryline54

Member
Sep 10, 2022
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I think it depends. If you're a buy-and-hold kind of investor, you're the type who likes to do your research and invest in companies that have proven themselves. You might be looking for stocks that have been around for decades or even centuries. You like the idea that your investments will pay off over time, and are willing to wait as long as it takes.

But if you're more of a trader, you probably want to see results right away—and you could care less how long it takes. You're looking for ways to make money quickly with investments that are riskier but also more lucrative.

So which one is better? It depends on how much risk tolerance you have! If you can stomach the ups and downs of the market, then trading may be right up your alley. But if you're not comfortable with risk and volatility, then buying and holding might be better for you.
 

Alex_BM

Member
Sep 10, 2022
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There is no one-size-fits-all answer to this question, as the best investing strategy depends on your individual goals and circumstances. However, in general, buy-and-hold investing may be a better choice for those who are looking to build long-term wealth, while active trading may be more suitable for those who are looking to generate short-term profits.

Buy-and-hold investing involves buying stocks or other securities and holding onto them for an extended period of time, regardless of market conditions. This strategy can help you ride out market fluctuations and avoid making panic selloffs that can hurt your portfolio's performance. Over time, the goal is to see your holdings increase in value as the underlying companies grow
 

Alex B.

Member
Sep 18, 2022
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Depends on the kind of risk tolerance you have but over all it's best to hold out on strong conviction and research bets.
 

flyingkiwiguy

Moderator
Sep 18, 2022
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Check your Sharpe ratios. If you aren't > 1.0, you have to consider that can't manage risk and should buy a diversified index portfolio of stocks and bonds. Use Dollar Cost Averaging to establish you portfolio.
 
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Admin

Administrator
Staff member
May 18, 2022
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Check your Sharpe ratios. If you aren't > 1.0, you have to consider that can't manage risk and should buy a diversified index portfolio of stocks and bonds. Use Dollar Cost Averaging to establish you portfolio.
And what do you think about crypto ?
 

Cynthia49

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Sep 22, 2022
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I guess it's better to be a trader. I believe this because traders have a lot more control over their investments. They can sell them at any time, and they know what they're getting into when they invest. Buy and hold investors are subject to market fluctuations that they have no control over, which means their money might be tied up for longer than they'd like.

Traders also have more flexibility than buy and hold investors do—they can sell whenever they want, whereas buy and hold investors have to wait until the asset is sold before moving on to another one. Because of these advantages, I think traders are better off than buy and hold investors.
 

David Viera

Member
Sep 22, 2022
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As a buy and hold investor, you're in it for the long haul: you're going to hold onto your investment for as long as possible, and if it dips, you'll be there to buy more. As a trader, you're trying to make money by buying low and selling high—and hoping that when you sell high, someone else will buy low.

Also, as a buy and hold investor, you'll probably have a better chance of seeing your investment grow over time. And if things go south? Well… that's not good news for anyone who isn't prepared for it. Traders can take advantage of market volatility (that is, when prices swing up and down), but they run the risk of being caught flat-footed when things go south—and then getting stuck in an even worse position than they were before.

In short: if you want to play it safe, go with buy and hold. If risk-taking is your middle name (or at least one of them), then maybe trading is right for you.
 

Baldric

Member
Sep 22, 2022
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You're probably used to hearing that the best way to invest is to pick one stock, hold it forever, and never look back. But what if you could make money without doing any of that?
Is it better to be a buy-and-hold investor or a trader?
I believe that it's better to be a trader than a buy and hold investor.

There are several reasons for this. First of all, trading allows you to take advantage of dips in the market and sell at a higher price. If you really believe in an asset, then you should be able to see when its value is low enough to buy in and sell at a profit later on. This means that your gains are going up instead of down like they would if you were just holding onto your stocks.

Another reason is that trading allows you to diversify your portfolio without having to spend as much money on each individual company. You can get exposure to multiple companies by buying shares in an index fund or ETF, which will usually cost less than buying individual stocks.

Finally, trading allows you to take more risks with some parts of your portfolio while keeping other parts safe. For example, if one company's stock goes down but another company's stock goes up, then you might want to sell the losing one but keep the winner even though they both belong to the same sector (such as technology).