Next year’s plan
This year I have made many investing mistake. one of the most important lessons I have learnt is the difference between trading and investing.
Investing is buying stocks that will go up in value in the long term. I have realised many stocks such as Tesla does not follow traditional PE ratios. This makes it hard to value a company as investors buy into companies future without being profitable. This also means people are valuing innovative or distributive technology companies more than well established companies. Investors need to also adopt to market trends as market demand and needs key changing.
Moving on Trading is buying stocks that will go up in value in the short term. There are 2 major types of trading. One is day trading while the other is swing trading. Day treading seems like the sexy way of buying and selling stocks but requires years of experience, large capital and allot of time. While swing trading is buying a stock and keeping it for at least a period of 2 days to 3 months. Swing trading is generally done based on technical analysis, news or a potential short squeeze. This can be hard as market makers controlling the stock prices can be unpredictable.
Stock market is a place where bulls and bears fight out to see who can make a change to the stock price. Investing in stock market with the intention to gamble will always lead to making bad and emotional trades that may result in a loss. Don’t take the stock market to be a casino as the house always wins. Invest in a company that has growth potential and sell at a price higher than what you have bought. It’s just a matter of time.
2022 is going to be a very unpredictable year as inflation may cause a big correction to the stock market. Invest with money that you will not need in the next few years.
With that happy investing!
Investing is buying stocks that will go up in value in the long term. I have realised many stocks such as Tesla does not follow traditional PE ratios. This makes it hard to value a company as investors buy into companies future without being profitable. This also means people are valuing innovative or distributive technology companies more than well established companies. Investors need to also adopt to market trends as market demand and needs key changing.
Moving on Trading is buying stocks that will go up in value in the short term. There are 2 major types of trading. One is day trading while the other is swing trading. Day treading seems like the sexy way of buying and selling stocks but requires years of experience, large capital and allot of time. While swing trading is buying a stock and keeping it for at least a period of 2 days to 3 months. Swing trading is generally done based on technical analysis, news or a potential short squeeze. This can be hard as market makers controlling the stock prices can be unpredictable.
Stock market is a place where bulls and bears fight out to see who can make a change to the stock price. Investing in stock market with the intention to gamble will always lead to making bad and emotional trades that may result in a loss. Don’t take the stock market to be a casino as the house always wins. Invest in a company that has growth potential and sell at a price higher than what you have bought. It’s just a matter of time.
2022 is going to be a very unpredictable year as inflation may cause a big correction to the stock market. Invest with money that you will not need in the next few years.
With that happy investing!
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