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Stock market investing and trading stocks are two different ways of looking at the stock market. There are pros and cons to each strategy.

Stock market investing and trading stocks are two different ways of looking at the stock market. There are pros and cons to each strategy.

Long term investing is simply the process of buying strong companies and holding onto them for the long term. Because the companies are fundamentally strong they are unlikely to go out of business any time soon and in fact they are very likely to increase in price as time goes by.

Stock trading works a little differently. Stock traders care less about how fundamentally strong the company is and more about where the stock is heading in the short term. Short term traders attempt to catch the short ups and downs that come with the stock market instead if just riding through the market.

Which strategy is best? There are defiantly advantages and disadvantages to each method. The best strategy for you really depends on you and where you are at.

Trading stocks in the short term does have a lot more potential then buying and holding. If you can make short term gains relatively consistent over the long term then you can do pretty well for yourself. However it does take a lot of work and there are no guarantees that you will make any money. It is like starting a business most people will fail their first time around, but those who can keep getting back up and learning from their mistakes will likely do well eventually.

If you are willing to put all of the time and energy into short term trading the rewards can be pretty nice.

However if you just want something that you can invest money into with a good indication that over the long term you will make money than buying and holding stocks could work out better for you. The advantages of long term investing is that it is really passive and has a proven track record to work.

Basically it comes down to what your goals are. If you want to focus more on other areas of your life and just invest into stocks for the long term then buying and holding can work out pretty well. However if you want to focus on getting the most out of your money then taking a look at short term trading can be a pretty powerful thing to do.

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