Let's take a moment and talk about the difference between investing, trading, and gambling because there's
a big difference between the three and it's important to know the differences so you think you're investing.
if really what you're doing is trading or gambling.
You really need to know the difference between that always and kind of getting a lot of trouble as far
as the returns or your success.
So let's look at investing so investing is really think of that as long term it's a long term play when
you're talking about investing it's not a short term fix like gambling maybe or or hoping to hit a homerun
or anything like that.
You know for a short term it's a long term play is how I would characterize investing and you're really
investing towards specific goals you are putting in money to get a return on that money to grow your
money so you can reach a certain goal whatever that might be.
Saving for college or university for a family member or saving for your own retirement or financial
independence or very common investing goals.
So you're saving for a specific goal and that you have a plan around it and that's a big part with this
course is it of my investing success course is all that you'll come planning on how to have a plan around
it and stick to that plan and executing the plan so investing long term play specific goal you have
a plan you rebalance as needed.
So if your stocks really take off or a certain part of your stock portfolio maybe a large cap stocks
or technology or something are going to learn about later in the course takes off.
Well then you can rebalance to put your portfolio on everything that you own back in place but it's
still going towards that specific plan you're still making these adjustments for the long term and you
can really succeed with investing with long term basic principles that you can use over time as we've
seen.
And as we know about investing over time it's all about time and time value of money and let your money
work and compound interest and all that working in your favor so investing can be a little boring at
times but it's really all about that long term play and saving towards those goals.
Let's compare that to trading because they're very close, they're closely related.
You know trading should be fun.
I do some trading and I'll talk about the in that way and how I invest how I trade and even how I gamble
and trading is fun.
It's more of that short term play.
Maybe it's something you're looking at buying a particular individual stock or so or it's something
you might be trading or making more frequent moves so of investing is more along the lines of let's
say buy and hold even some active part both the more buy and hold for a long term training would be
something would be much more active in factors concept called day trading probably have heard of where
you're basically trading multiple times in a single day trying to get that little bit of edge as you
make these trades so trading can be take a lot of work.
You might also need more money as far as your frequent trader and you want to you have at least some
diversification of 20 to 30 stocks that might be trading in and out frequently.
So think about that as far as your investment of time and concepts you on this course you can use in
training or investing but you know think about your concept as far as the time that you have.
you also incur more transaction fees if you're doing lots of trading.
So when we talk about fees you'll learn about how each time you're buying and selling you're incurring
fees.
So the more trading you're doing the more actively buying and selling stocks each time that incurs a
fee.
So understand that your overall return maybe looks great.
Maybe your great trader but all those fees eat away at it and so many times the long term investor will
certainly outperform a very active trader in most cases.
That's why you hear a lot about the index mutual funds where there's very little trading going on within
the fund at all because it's you know basically buying the index and we'll look at those.
But that's the concept.
behind that.
The other thing we're trading for individuals is it can really run into more behavioral issues too and
things to be aware of.
You know a lot of times people might be not willing to sell their losers for example because they have
hope that it's going to come back.
The stock is going to come back on the right and all the way down when they should have really just
bit the bullet and sold it.
So there's a behavioral issues or maybe you're chasing after winners because you're chasing after something
that your neighbor or your coworker said he his great stock will buy and you're getting in late and
you're really buying high and maybe you missed out on that and now the price has gone down or so you're
not buying High.
You're not buying low and selling high you're buying high and then selling low which
is, you know a loser's game.
Of course.
So be aware of that with trading.
Do you have the time with that do you have the behavior's to you know to make it work for you understand
to get more diverse cation if you do get lots of trading you might need more money for training individual
stocks.
It's really all about succeeding by personal skill so it's you thinking that you can beat the market
that you can beat others who do this maybe full time and really looking for those little edges.
And I do a little bit of it too.
I also I I and I'm very successful at that but that's not my whole perform more of a long term investor
with some trading that can do for fun.
Remember the first part about fun.
Now gambling if you gamble at all.
They really should all be about fun.
I mean they're gambling to try to think you're going to beat the house or be real successful or the
long term.
That's really hard to do if you're a very successful even this course go gamble and be successful gambler
me take a gambling course.
I don't know.
But the idea is that you know gambling is if you do it is meant to be fun and you want to try to limit
your losses.
But the idea is fine it's not investing and it's not trading it is gambling and one thing that any you
know people will tell you is when you gamble expect to lose.
I mean think about these big massive casinos that you see out there in Las Vegas or Monte Carlo or wherever
across the world these big hotels and casinos while they're funded on gambling money your money and my
money.
Right.
So they're making a lot of money.
So they're making a lot of money. Who's not making a lot of money.
Well it's the individual gamblers so I approach gambling with like if I'm going to gamble for find better
horses or play cards or whatever it may be you know that there's an expectation to lose and I want to
limit my losses.
You know, if I go to the track for example once or twice a year my goal when I watch the horses
race it's fine they're beautiful animals but I only bet very small amounts $5 US or less sometimes
and only money that's in my pocket I don't bring credit cards or anything of that I'm just going to
lose a small amount.
It's more about having fun than trying to make a big score so to speak.
So one question might be is something like day trading where your frequent are trading is that is that
kind of gambling.
I mean you're gambling you're trying to evaluate let's say a horse or evaluate something and then make
a bet on that. Day trading gets a little bit more like gambling.
You know, one way to think vs. long term investing where you put it
and you know you invest your money and let it work for a long period of time.
So that's something to think about when you're looking at investing vs. trading vs. let's say
gambling.
Now for myself to share.
I'm all about investing, I'm a long term investor.
That's where I've had my success and what I'm hoping you'll get out of this course is that long term
investing towards specific goals rebalancing making changes as needed.
And you know building a good diversified portfolio those are the ways to success proven over and over
again.
So I consider myself an investor in particularly a long term investor. I do trade too as far as
trading stocks and you will learn about different ways you can apply these principles from financial
ratios to whatever in the course here.
So you can do trading as well.
And I do that because remember that part of fun.
You know it's fun for me it's interesting keeps me engaged in the market keeps me engaged in the stocks
and I've had some success because I enjoy looking at a basket of stocks and I'm actively more trading
versus my long term buy and hold type strategy.
But it's really about fun.
And I you know make sure I watch my behavioral stuff.
You know they don't do something dumb like you know buy high or or are so low or so might that just
be aware of that but understand it's not like what I'm doing 100 percent of the time I'm an investor with
some trading and as far as gambling.
Yeah.
As I mentioned I might bet on a horse every once in a while but it's all for fun.
Lose very small amounts of money.
I think that most of my loss was like $20 US or $30 or something like that keep it very small and I've
won some too.
But it's all been going out with the family or friends and having fun.
So take a step back as we go through the course and think about yourself.
Am I an investor am I a trader or am I a gambler and I'm telling you for a long term success, error to the investing
side you'll be glad you did.