Trading and investing can both be effective strategies and they generally agree on a number of major points.
But the contrasts between investing and trading can be dramatic, as illustrated by the metric below.
We all have trouble thinking long-term, of course, in part because we tend to discount future value far too much (along with difficulties on account of optimism bias and what Dan Kahneman calls the planning fallacy — we tend to overestimate our ability to control the future). If you doubt me, ask yourself how your diet and exercise plans tend to turn out. So, are you a trader or an investor?
Categories: Capital Markets
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