What’s the difference between investing and trading in the stock market?

There is a huge difference between investing and trading in the stock market.

Parkett-Boerse in Ffm
Parkett-Boerse in Ffm (Photo credit: Wikipedia)

Trading

Trading in the stock market means that you need to time the market, you need to know when to buy and when to sell stocks.  This strategy is a lot more risky than investing since you never know when a stock might dip or if a stock price will still go higher.  This strategy also requires you to closely monitor your stocks day in and day out.

Investing

Investing in the stock market means that you are purchasing stocks for the long term, probably a minimum of 3 years, setting aside a fixed amount to purchase stocks and at regular intervals.  This is what is often called cost averaging and is one of the safest ways to earn from the stock market.  The Truly Rich Club of Brother Bo Sanchez based their strategy on this, cost averaging.  The advantage of being a member of the Truly Rich Club is that you will be guided on what stocks to purchase and what would be the target price.

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