Short-term vs Long-term Investment


Short-term investment refers to a few days or a few week's time period (also called day trading). However, a long-term investment refers to a few year's time period.


The investment style depends on many factors such as risk tolerance, psychology, stress tolerance level, capital invested, and market factors. A spectrum of emotions including happiness, anger, and frustration is involved in the investment process. Market factors can include the type of industry that you are choosing for investment. Some markets such as cryptocurrency have more fluctuations that other markets. If you have invested most of your money in the stock market near the retirement age, you are taking more risk than normal. Short-term investment requires you to always be vigilant. You need to follow news and be involved in different investment groups on a daily basis. Short-term investors usually use technical analysis as their analysis tool while long-term investors perform fundamental analysis.


In summary, you need to consider your style. If you have enough time to follow news and are more stress-tolerant, then the short-term investment may be a good option for you. On other hand, if you want to invest in companies with long-term potential and you do not have enough time to follow stock market news on a daily basis, then the long-term investment is a good option for you.


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