You may have heard of some people who invest for the long term. Then, you've heard of other people who invest short term, such as day traders. It's actually improper to call them both investors. They're different. We so often use the terms “investing” and “trading” interchangeably, but there's actually a big difference between the two. Investing is long term buy and hold. I'm going to buy a stock. I'm going to hold it for a long time until I retire, or I might give the stock to my kids or my grandkids or my great-grandkids. The idea is that I am going to hold onto that stock regardless of whether it goes up or down. I'm in it for the long term. This is what a lot of people are familiar with - buying and holding for the long term. That's called investing.
The idea or the goal of investing is to protect what you have. So many people think that if they invest, they’re going to become wealthy some day. Investing is not a wealth creation strategy. It's a wealth preservation strategy. It's something that everyone should take part in. But, if you're investing with the idea of becoming wealthy, it will be very hard to do so.
Let's take a look at the second term - trading. Trading is the idea of buying something and looking to make a profit in the near future - to make money fast. That's the idea behind trading stocks. It's more short term. I'm going to buy a stock and watch it go up for a week, and then I'm going to sell it. You also have day traders who try to buy a stock and sell it within a matter of minutes, or maybe within a couple of hours. They'll do lots and lots of trades. The idea behind trading for the short term is solely to create cash flow. The goal is to make money that you can use for everyday things like paying your bills or buying groceries, or storing away for a quick vacation next year. Trading is more for the purpose of creating some wealth, whereas investing is for protecting wealth. There's a big difference between the two. It's important for us to realize that, and not to get them confused.
Whenever you come to a stock trading event with TRADEWay, our very first step is to teach you a little bit about the trading aspect. Our goal is to teach you how to trade stocks to potentially create wealth for you and your family. That's the idea. That's the goal. Then, as you progress through our system, you'll learn more investing type strategies. In fact, in step three, we'll teach you what the Bible says about investing and how to invest long term. It's all Biblically based and the methods are found in Scripture. If you'd like to join us to learn how to stock trade or how to invest, check us out at Tradeway.com.