The act of investing is laying out money or capital in an enterprise with the expectation of profit. Investing is putting money into stocks, bonds, mutual funds, real estate, or some other financial vehicle, with the hopes that it will grow and earn profit . There are two personal styles of investing i.e day trading and long-term investing.
Day Trading
Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day. Traders that participate in day trading are called active traders or day traders. A day trader only holds a stock for short period of time before selling it; sometimes for hours or minutes. Day trading is a very active, intense, hands-on way of investing, that requires a significant amount of time, and isn’t for everyone.
Long-Term Investing
Long-term investing is much less intense than day trading. It is investing for the long run; buying stocks and holding on to them for years, even as market conditions change.
Market Watch
Day traders watch the markets on computer and television screens to monitor their trades, from the time the market is open until it closes. They look for any fluctuations in a stock. The changes in the stock price let them know whether they should buy that stock, or if they already own it, buy more of it, or sell it. Long-term investors check in on their stocks at a much more relaxed pace. It can be weekly or every few months, whenever the investor feels inclined to.
Risks involved
All investments styles carry some level of risk. Making money from an investment is not guaranteed. Sometimes there are profits and sometimes there are losses. Although day trading is very risky, for experienced day traders, it can also be lucrative. Day traders and long-term investors can make money in the stock market. Long-term investing is more common than day trading.
Warning
Every time a trade is made, an investor has to pay a commission, whether they buy or sell, or the trade made money from the trade or not. Day trading commissions can add up very quickly.