- Stock investor
A stock trader or a stock investor is an
individual or firm who buys and sellsstock s or bonds (and possibly otherfinancial asset s) in thefinancial market s.tock trader versus stock investor
On the other hand, stock investors purchase stocks with the intention of holding for an extended period of time, usually several months to years. They rely primarily on
fundamental analysis for their investment decisions and fully recognize stock shares as part-ownership in the company. Many investors believe in thebuy and hold strategy, which as the name suggests, implies that investors will hold stocks for the very long term, generally measured in years. This strategy was made popular in the equity bull market of the 1980s and 90s where buy-and-hold investors rode out short-term market declines and continued to hold as the market returned to its previous highs and beyond. However, during the 2001-2003 equity bear market, the buy-and-hold strategy lost some followers as broader market indexes like theNASDAQ saw their values decline by over 60%.Methodology
Stock traders/investors usually need a
stock broker such as abank or a brokerage firm to access the stock market. Since the advent ofInternet banking , anInternet connection is commonly used to manage positions. Using theInternet , specialized software, and apersonal computer , stock traders/investors make use oftechnical analysis andfundamental analysis to help them in the decision-making process. They may use several information resources.Expenses, costs and risk
Trading activities are not free. They have a considerably high level of risk,
uncertainty andcomplexity , especially for unwise and inexperienced stock traders/investors seeking for an easy way to makemoney quickly. In addition, stock traders/investors face several costs such as commissions, taxes and fees to be paid for the brokerage and other services, like the buying/selling orders placed at thestock exchange . According to each National or State legislation, a large array of fiscal obligations must be respected, and taxes are charged by the State over the transactions,dividend s andcapital gain s. However, these fiscal obligations may vary from jurisdiction to jurisdiction because, among other reasons, it could be assumed thattaxation is already incorporated into thestock price through the different taxes companies pay to the state, or that tax freestock market operations are useful to boosteconomic growth . Beyond these costs, theopportunity cost s of money and time, thecurrency risk, thefinancial risk , and all theInternet Service Provider , data and news agency services andelectricity consumption expenses must be added.ee also
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Day trader
*Dead cat bounce
*Fundamental analysis
*Option (finance)
*Shareholder
*Stock
*Stock broker
*Stock exchange
*Stock market
*Technical analysis
*Technical Analysis Software (Finance)
*Trader (finance)
*Value investing
*Paper trading
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