THE POPULAR MISCONCEPTION is that traders are foolish short-term gamblers while investors are the prudent, steady hands in it for the long term. But whether you call it trading or investing, the golden rule remains the same: Don’t lose money. While investment goals and styles are different, we are all gunning for the same result. Not great companies or funds with five stars, but consistent returns that outpace inflation.
As a trader, my goal isn’t to make trades all day long, but to secure a rate of return that protects my investors’ principal and makes them money…period. Saying it’s a tough market is just an excuse, and unlike investors who are “in it for the long haul,” I don’t see any compelling evidence that owning stocks for long periods of time is the best way to achieve that return. (more…)