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Long-term investing or short-term trading?

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Old 08-09-2013, 09:36 AM   #1
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Long-term investing or short-term trading?

A question for the experienced investors here. Which one is more profitable? Long-term investing or short-term trading?

From personal experience, the very successful ones I heard got rich from long-term investing. Does this observation agree with your own?
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Old 08-09-2013, 09:45 AM   #2
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Yes. I believe with this thread, there would be a lot of short term trader coming in to tell you otherwise. I must first say that I measure my return using annualised return.

Unless you can time the market well and can buy at the low point and sell at the high point, long term investing makes more sense.
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Old 08-09-2013, 10:24 AM   #3
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I like this kind of topics. Both can be profitable, I'll go for both!

The initial capital will be an important factor. Long term investing sounds good, but need a proper capital to see some return. Trading on the other hand require a much lower capital outlay.

Next, doesn't matter which matter, it really matter if one is doing it right.

And many more factors, which I'm lazy to type an essay with my phone. Haha
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Old 08-09-2013, 10:41 AM   #4
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Investing and trading are 2 different things. Invest is to grow wealth, trading is to get income. You can't compare which is better. They are apple and orange.

Everyone should learn how to do both, but investing is more important than trading.

If you can only do one, then choose to do Investing.
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Old 08-09-2013, 10:42 AM   #5
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different personalities will be needed to play into the different styles. rather than saying which is more profitable, it is better to ask which suits you better
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Old 08-09-2013, 10:44 AM   #6
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If my counter went up within a few days of my purchase, then I am a short term trader. If the counter do not move much, I am a long term investor.
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Old 08-09-2013, 10:56 AM   #7
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It depends very much on the counter. Bought Kep corp, UOB, Chartered Semi, and NOL in the early 90s. My returns would have been better if I have gotten rid of Chartered and NOL. err.. I halfed Kep corp whenever it doubled... sigh. Kept Chartered until it kaput. Not all counters are created equal. Some are for long term and some are for trade. Don't overlook the skill of getting out of a position.
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Old 08-09-2013, 11:11 AM   #8
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different personalities will be needed to play into the different styles. rather than saying which is more profitable, it is better to ask which suits you better
Well said.

Choose the one that suits you the most and stay the course.
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Old 08-09-2013, 12:49 PM   #9
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If u have lots of capital > 50-100m by all means long term. More money x long term = more money.

But if u only have 20k. Then little money x small and many profitable trades = more money.

Can u imagine putting 20k to long term of 10 yrs of which makes 3% annualized (or 30% for 10 yrs) taking into market cycle.

Thanks and u just made 30% * 20k which is just 6k for 10 yrs of investing, $600 for a year and $50 for a month. Be realistic.
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Old 08-09-2013, 12:52 PM   #10
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I invest + trade. Money and time no enough.
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Old 08-09-2013, 06:17 PM   #11
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I buy stocks that I am willing to hold for at least a few years i.e. good dividends. However, I buy them at their lows and will sell when they rise high enough.
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Old 08-09-2013, 07:10 PM   #12
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It depends very much on the counter. Bought Kep corp, UOB, Chartered Semi, and NOL in the early 90s. My returns would have been better if I have gotten rid of Chartered and NOL. err.. I halfed Kep corp whenever it doubled... sigh. Kept Chartered until it kaput. Not all counters are created equal. Some are for long term and some are for trade. Don't overlook the skill of getting out of a position.
humans have the tendencies of holding on to losses for too late and cutting on to profits for too quick.

your examples are good evidence as to why long term investing does work and can generate good returns to the overall portfolio. 1 or 2 good picks can easily cover up losses of many rotten stocks.

assuming your NOL and UOB returns are so so, you have loss 100% with chartered but would have gain >x10 with keppel corp if you choose to do nothing.
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Old 08-09-2013, 07:53 PM   #13
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humans have the tendencies of holding on to losses for too late and cutting on to profits for too quick.

your examples are good evidence as to why long term investing does work and can generate good returns to the overall portfolio. 1 or 2 good picks can easily cover up losses of many rotten stocks.

assuming your NOL and UOB returns are so so, you have loss 100% with chartered but would have gain >x10 with keppel corp if you choose to do nothing.
Agree. But it would be nice if I could cut NOL bought at 5+ earlier. Now, I only give back a certain % of my profit or % of loss. I can always buy back if I am wrong.
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Old 08-09-2013, 11:30 PM   #14
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Agree. But it would be nice if I could cut NOL bought at 5+ earlier. Now, I only give back a certain % of my profit or % of loss. I can always buy back if I am wrong.
the thing is you dont invest with a rear view mirror. if yes, you could sell chartered at the peak too and buy some more keppel or uob at the bottoms of any corrections.
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Old 09-09-2013, 02:03 AM   #15
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Put 90%~95% into long term investment which should preferably be passive/low cost/diversified - lower risk and lower rewards, but hopefully protect capital from inflations and make some gains, and minimise losses in case of sudden market crash.

Put 5%~10% capital, which you can afford to lose, into short term trading that is higher risk and higher gain. Some profits form trading can go into your long term investment too. The risk is limited to small upfront capital in this case. Trading involves tricky market timing, individual psychology, discipline and basically hard work. Note that some people are not suited for short term trading

For beginners, it may be better to start figuring out how to do long term investing first, preferably passive type of investing and minimise risk as much as possible, or value/dividend type of investing if you are capable of learning the ropes. This allows time to acquire knowledge of how market operates in preparation for learning how to trade shorter term. Try not to base short term trading mainly on indicators - it looks easy but is too 'ambiguous'.
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