Day trade
I've said this before, but it's worth revisiting because it's such a common misconception that day-trading is the best way to make money in stocks, especially among new investors. Aside from the fact that most new investors don't understand nearly enough about how the markets work to effectively day trade, the mathematics of it simply aren't in your favor.
Let's say that you make a total of 20 round-trip (buying and selling) trades per trading day. With roughly 250 trading days in a year, that's 5,000 buying transactions and 5,000 selling transactions. At a $10 commission, this translates to $100,000 per year in commissions alone. To put this in perspective, your trades could actually generate $80,000 in gross profit for the year, and you'll still end up losing $20,000 – you'll need a six-figure trading profit just to break even.
How bad does day trading usually turn out, exactly? It's tough to quantify it with dollar figures, but the facts show that it's pretty difficult to make any money. One research report found that just 13% of day traders earn a net profit in any given year, and only 1% are consistently profitable.
Do yourself a favor and stick to buy-and-hold investing -- leave day-trading to professionals. Maintaining a portfolio of high-quality stocks is the most certain path to stock market wealth. You're not going to get rich tomorrow, but you won't go broke, either.
