Long-term investment vs. short-term investment
I had a feeling after chatting with a friend.
Share my views on long-term and short-term investments:
Everyone with long investment experience should have heard that long-term investments have a better return in the long run than short-term investments. The main reason for this statement is that the price trend appears to be more stable and less variable on a long-term chart than a short-term one. As a result, short-term investments seem more likely to lose money.
Actually, if you think of a short-term chart as a long-term chart after time is accelerated, you will find that apart from differences in leverage, the winning rate of all trading strategies is similar in the long and short cycle chart. Using the same trading strategy, you have more trading opportunities in the short term and higher leverage in the long term. In fact, the final yield is about the same.
The focus is on using the right and effective”trading strategies”。
Some friends will ask, why am I passionate about using short-term strategies? The reason is “compound interest.” To make it easier for novice friends to understand, here's an example:
Assuming the same trading strategy, the annual return on long-term investments is 12%, with an average monthly yield of 1%. Short-term investments have a yield of 1% per month and are carried out continuously for 12 months. As a result, the actual annual return on short-term investments is no longer 12%, but 1.01^12 = 1.1268, or 12.68%.
Once again, the most important thing is the right approach to trading.
The stock market will also reward you for your hard work, provided you are doing useful hard work; otherwise, you are doing yourself a disservice! This is why it is recommended that newbies make long-term investments in stable stocks when they haven't established their own trading strategies, because they make fewer mistakes.
I wish everyone a successful transaction!
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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Start: 16/04/2024
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