Friday, October 18, 2013
Trade vs Investment
Trades: it is a short term relationship with a company to try to make money. Normally this relationships last from 3 months to 6. If you invert money as a trade and dividends happen excellent, you can make a lot of money. If the market increase and you are making money keep the trade until catalyst happen or if it decrease and you are losing about 15% of the money you invert than sell it.
Investment: it is a long term relationship with a company, kinda as a marriage and just like a marriage you can get divorce in investment you can finish your relationship any time. Dividends most of the time brings good things to the company and those things increase the money that you had invested and if the stock market increase the price you can sell some sits that you already own in the company but the best thing to do is borrow some sit to someone else at the end you can increase the money that you are earning. If the stock market decrease the prices you have 2 options 1 you can buy more sits in the company or sell some of your sits but If catalyst haven't happen than you can wait until it happen and win more money than the one that you inverted. For short sell buy some of the sit of a company that broke or is about to brake and than sell it in the market with even a higher price than the one that you bough it.
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