Get to know more deeply, the difference between Stocks vs Investments
Get to Know Deeper, The Difference Between Stocks vs Investments. Maybe most people look foreign or are still new to the world of stocks and investments.
Even the term above considers stock investment and stock trading the same.
In fact, this assumption is wrong (not quite right), because the two have quite significant differences, both in terms of risk, concept, as well as flow or strategy.
For this reason, the GOBUSINESS Admin this time, would like to explain a little information regarding the difference between stocks and investments
Get to know more deeply, the difference between stocks vs investments
Stock vs Investment Difference
The first is the difference in terms of the basic concept, where this stock investment prioritizes or focuses on the side of buying shares. It aims to store and resell in the long term.
In the long term, then you will have a great opportunity or opportunity to get a profit of up to 2 times the total amount or money invested.
While stock trading is the opposite of stock investment inversely.
You or the user are required to buy shares and immediately resell them when the price soars
It takes skill and care in calculating and determining when is the best time, so that when selling or releasing shares you get abundant profits.
From the level of risk, generally there should be between investing in stocks and trading stocks. What is meant by stock investment in this case is the risk of capital loss and the risk of liquidation. The risk of losing capital occurs when the assets or shares owned (purchased) are of lower value at the time of resale.
Liquidity risk is the risk that occurs when a company is declared bankrupt or bankrupt by a court or company.
The risk of stock trading can be said to be quite high because traders cannot keep stocks for a long time.
Remember, market movements are unpredictable, you can buy high value stocks at that time (today) because prices are going down and are predicted to go up.
Recognize the Difference Stock vs Investment
Even unexpectedly, sometimes the political situation or the global economic system changes, resulting in a drop in stock prices.
Stock vs Investment Difference
Purchase of shares purchased from stock investment and stock trading also has differences. For those of you who want to invest in stocks, you can buy layered stocks, such as the term first-tier stocks or what are known as blue chips. This stock method is perfect for you beginners because the level of risk is relatively low.
In contrast to stock trading in general, the shares to be purchased tend to be in the second or third tier shares. If market conditions are good, the price will soar in a matter of 1x24 hours (one day). Another alternative is to choose shares that are included in the Initial Public Offering (IPO).
The next difference between stock investing and stock trading lies in the strategy used. In general, the difference can be seen in the following points:
Stock Investment Strategy
Stock Investment Strategy is usually done by investors. The stock strategy is to pay attention to the supporting factors that affect stock movements.
Usually investors understand and do not care about price fluctuations. While the stock investment strategy is to buy shares of issuers that have a healthy performance/quality of work and have strong fundamentals.
Investors tend to choose strong companies such as banks. The selection of this method is based on profits and dividend distribution within a certain period of time
Stock Trading Strategy
This Stock Trading Strategy is usually carried out by traders who prioritize strategy patterns, based on market movements and conditions rather than the shares purchased. For example, when the stock market goes down due to global economic and political factors, traders will not rush into the stock market until the situation and conditions recover (normal).
Next, traders emphasize targeted strategies. They will not hold their trading positions long enough. This strategy is carried out based on profit targets, stop losses, to the level of risk-reward ratio.
The last point after you understand the above explanation about the difference between stock investing and stock trading, now it's up to you. Do you want to dive into the world of Stocks or Investments? In fact, both systems have their respective advantages. In fact, both can also be said to provide benefits for your future.
That's our brief explanation of the Difference in Stocks vs Investments. Thank you for reading the article from the latest gobusiness. Hope it is useful.