Why You Should Pick Long Term Stocks Over Trading
Budding new investors always get excited at the possibilities of making money on the stock market. However, the reality is far from ideal. If you’re not careful with your money, you can lose your shirt. Just look at what happened during the market crisis in the summer of 2008. It created a recession that we’re still in the process of getting out of. And in this global economy where everything is interlinked together, a contagion from one region can spread to the next like the European debt crisis is threatening to do. The bottom line is that if you don’t have a strong stomach for market fluctations, you should get out of the game.
Therefore, it is of vital importance that an investor takes a long term view regarding his stock portfolio and fills it with value growth stocks that he can let grow for the future. While it is true that some people can make fast money playing the markets, the fact is that your luck can only hold out for so long. You make fast money but then you lose it quickly as well. If we look at the greatest investor in the world, Warren Buffett, he didn’t make his fortune by speculating. He always picked long term stocks with the plan to buy and hold.
People might say that the buy and hold method is old fashion and not in tune with today’s fast paced society where money moves in and out quickly especially with the software programs that allow regular people to play at trading. However, the fact remains that all this buying and selling requires you to be right with every transaction in order to make money on the slight upticks. It also requires you to have a lot of capital in order to make it worthwhile. How can you possibly pick all the right stocks when you don’t do your due diligence?
Frankly, if you want a good sleep at night, just follow the advice of Buffett and buy and hold quality stocks. After all, whoever has the biggest bank account should know best.
Tags: buy and hold, global economy, growth stocks, investor, investors, long term stocks, making money, quality stocks, stock, stock market, stock portfolio, value stocks, warren buffett
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