It's the difference between an investor and a trader. An investor in a great long-term stock like ML will buy the dips and hold for a 10-bagger, while a trader will stop out on dips, buy on breakouts, sell at x profit, rebuy on news and good chart setups, etc. If he does everything very well, a trader might make more on a great stock than the investor, but the investor will have had a lot more free time, a lot less stress, easier tax preparation, and a smaller tax bill. More often than not, the trader will sell too early, not rebuy nearly as much, if any, and make far less than the investor.
The investor looks to increase his portfolio X times over Y amount of time, while the trader usually looks to make Z dollars a year. I know -- I was a very active trader for years and did very well (or so I thought), but have found investing in great companies works much better for my lifestyle and multiplying the portfolio much more quickly. |
