It often happens when you buy a company’s stock and start constantly monitoring the market and https://telegram-store.com/catalog/product-category/channels/economics. Many people even lose peace because of it. They are constantly watching the market, logging into the app several times an hour to see if the stock is up or down. Based on this information, they decide whether to buy more stock or sell the current stock. But do they really need to spend so much time on this? The answer to this question will be written below.
To begin with, it’s worth figuring out who you are. There are a total of 2 options:
- Trader.
- Investor.
Depending on the role chosen, the answer to the main question will be different. We will consider two options at once, to make it easier for readers to navigate them.
Trader
Many people compare trading to investing, but they are slightly different concepts, although both involve changes in quotations. Market changes in investing are extremely slow. The whole process may take up to several years. Naturally, in this situation there is no need to follow the market closely. As for trading, it is exactly the opposite. The situation can rapidly change within several days.
That is why a trader has to watch the market all the time, as even the smallest hiccups can lead to disastrous losses. If the director of a company becomes involved in a scandal or any other high-profile event, the situation will drastically worsen. Traders can simply wait for the incident to blow over. This usually takes quite a long time.
When it comes to high-frequency trading, following the market makes no sense. After all, there are about 1 thousand trades per second. There is a completely different calculation that the trader must be aware of.
Investor
If a person has decided to engage in investing, he is well aware that it will last a long time. The process is as simple as possible. A person finds a new company, which should develop in the near future, and invests money in it. Then there is a waiting period. Only after it has passed will the invested money pay off. Investors count on the growth of the market, which with a lot of time really happens. In addition, they regularly receive payments from the income of the company of their choice. But it is necessary to understand that the organization must be reliable, but not fake. Otherwise, it is possible to lose all the money invested. You can determine the reliability of the company with the help of fundamental analysis.
In the case of investment there is no need to monitor the market. It makes no sense, because according to the original idea, the shares should remain for several years. Even if the company becomes involved in a scandal, it will not affect the investor’s profit. But you shouldn’t completely forget about your portfolio. It should be checked from time to time, as rebalancing may occur.
Bottom line
If a person has chosen long-term investing, he does not need to constantly monitor the market. Checks are needed only before investing money and a few times after purchase. The rest of the time the process is fully automated and does not require the attention of the investor.
If trading is your choice, then get ready to spend a lot of time on checking the market, because it is an integral part of every trader.
It is impossible to answer what is better: trading or investing? Each option has its pros and cons. The main thing is to understand the subject thoroughly and study all the necessary information in order to multiply and not to lose the profit.