What is Investing?
Investing is putting your money aside for long term gain, and over a long period of time. Think (5-10 years)
What is Day trading?
Day trading is putting your money into stocks for short term profits. Think (Few hours-few days at most)
What are stocks?
Stocks are shares/ownership of a company publicly being sold so that the company can use that money in order to grow there business.
Comparison of Investing & Day Trading
Long term profit > Short term profit
Less Risky
Trying to make the best purchases for the long term
Ex. Running slow during a race to get results over time
Real Life Examples: 401k's, Retirement Accounts, High Yield long term savings accounts
Short term profit > Long term profit
More risky (deals with more volatile stocks)
Trying to make the best pruchases for the short term (quick profit)
Ex. Running fast during a race to get ahead as soon as possible
Real Life Examples: Meme Coins, Meme Stocks
What is the purpose of Stocks/Investing?
Its usually to build wealth & grow your exisiting money, and many people do it as a source of income.
FAQ of Stocks/Investing
If a stock I put money into is going down is that bad?
Yes and no. Stocks usually go up and down throughout the day. It's not always a bad sign if a stock is going down but a fair rule is if the amount you've invested in has lost 10% you should consider pulling out.
Should I sell stocks that are going down?
This depends on person to person, and there risk tolerance. But you should usually see if there is any relevant news of the company to make a decision.
What does the popular phrase: Sell high, buy low mean?
You should aim to buy stocks at a lower price than the amount you plan on selling it for in order to make a profit. For example, buying stockks when there on sale and holding onto it until everyone wants it. Think of it as like buying an unpopular clothing item for a low price, but then selling it later on for a higher price than you initially bought it for, to make a profit.
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