Trading vs. Investing: Why Trading CANNOT Beat THIS Strategy!

Описание: Trading vs. Investing: Why Trading CANNOT Beat THIS Strategy!

If you like this kind of thinking, you’ll probably enjoy the blog too:
https://www.compoundwithrene.com/

Let’s start with the obvious: there’s too much investing content out there! Most of it is surface-level, driven by frequency, clicks, or engagement hacks.

I built my blog to be the exact opposite:
✅ The highest quality write-ups you will find on the market
✅ Low-noise, high-signal.
✅ Deep thinking, not dopamine-inducing content.
✅ In-depth write-ups on hidden, but super high-quality businesses from all across the globe
✅ Timely updates on my portfolio decisions
✅ Mental models & valuation templates to improve your PROCESS
✅ Exclusive interviews
✅ Macro commentary


Trading does not work! And that’s simply because traders do not benefit from possibly the most powerful force in the investing universe. And I have run the numbers and in this video I will show you with the help of a few simple examples why trading is a vastly inferior investing strategy – especially for the average investor. I will show you that even if a trader generates exactly the same annual return as a long-term investor, the trader will end up with a much worse financial outcome.

Trading or Investing: Which strategy is better? We will look at three different investing strategies: Short-term trading, long-term trading, and long-term investing (aka buying stocks for the long term) and compare their long-term investing results. But before we do that, we will clarify what the difference between trading and investing (buying stocks for the long term) is. Generally speaking, Investing and trading are two very different methods of attempting to profit in the financial markets. When you are trading, you are buying and selling assets based on expected short- and near-term price movements. So traders attempt to take advantage of both rising and falling markets over a shorter time frame, sometimes a few minutes, sometimes days, months, or quarters. And thus traders take smaller, but more frequent profits. Broadly speaking, traders are also often less concerned about the actual fundamentals of the underlying asset and they use technical analysis tools, such as moving averages to find high-probability trading setups.

By contrast, when you are investing, you are more concerned about the fundamentals of the asset. If you invest in stocks, for instance, you are buying an actual stake in a business and you make that investment based on the expected long-term cash returns of the business AND you possibly think there is a high probability that the intrinsic value will go up. So naturally, investors, in contrast to traders, take action less frequently as they have a longer time horizon and seek larger returns over an extended multi-year period. That’s especially the case if they are following a quality-focused buy and hold approach and not a special situations strategy which may be shorter-term in nature.

Why trading is so difficult and why investing is better than trading!


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OTHER LINKS:
○ Overview of capital gain taxes: https://turbotax.intuit.com/tax-tips/...
○ INVESTOPEDIA: The Difference between investing and trading: https://www.investopedia.com/ask/answ...

MUSIC:
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DISCLAIMER:
The content provided on this channel should be considered an educational resource and should not be construed as individualized investment advice, nor as a recommendation to buy or sell specific securities. The stocks and funds discussed on this channel are examples only and may not be appropriate for your individual circumstances.

Before making any financial or investment decisions, I recommend you consult a financial planner or advisor to take into account your personal investment objectives, financial situation, and individual needs.

In no event shall René Sellmann be liable to any viewer for any damages of any kind arising out of the use of any content published on this channel, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages.

I hope you enjoyed the content!