The differences between long-term and short-term investing

[Jojo]

Long-term investing involves buying and holding investments for an extended period, typically five years or more, with the goal of achieving capital appreciation and building wealth over time. This approach allows investors to ride out market fluctuations and benefit from the power of compounding returns. In contrast, short-term investing, or trading, focuses on capitalizing on short-term price movements to generate quick profits. While short-term trading can be lucrative for experienced investors, it requires active monitoring of the market and carries higher transaction costs and tax implications. Ultimately, the choice between long-term and short-term investing depends on your financial goals, risk tolerance, and investment horizon.

[Zelda]

In my experience, long-term investing focuses on holding assets like stocks or real estate for years, allowing them to grow and compound over time. For example, buying shares in a stable company like Apple and holding them for a decade. Short-term investing, on the other hand, involves quick trades to capitalize on market fluctuations, such as buying and selling stocks within days or weeks. Day trading tech stocks is a good example of this approach, requiring constant monitoring and quick decisions.