A friend recently asked me if I own any long-term stock positions … The answer is NO!
I’m a trader, not an investor. This is the all-important distinction I’d like to talk about…
Yesterday, the SPDR S&P 500 ETF Trust (NYSEARCA: SPY) was down nearly 1% on the day.
I heard investors worried about the value of their portfolios. I don’t blame them and I sympathize with anyone who’s watching the value of their stocks fall day after day.
But this is what I’m getting at. It’s why I advocate for short-term, in-and-out trading.
I want you to execute trades swiftly, book profits quickly, and cut any losses immediately.
With that in mind, keep reading to hear my thoughts about trading vs. investing (and why I’ll always recommend the former).
Why Now Is the Time to Trade (Not Invest)
Now is one of the best times in recent history to be a trader. Let me explain…
Volatility is starting to ramp up as we head into the September Effect.
But as traders, we have no reason to panic about the possibility of a broad market selloff.
Rather, we have a reason to be excited … to take advantage of the volatility.
When it comes to negative market sentiment, an index investor’s worst nightmare can be an options trader’s best friend.
It’s all about your outlook, your mindset, and how you approach certain periods of ultra-volatile price action.
Imagine being a long-term investor in 2022, holding a huge basket of stocks, powerless to do anything but watch them tumble lower week after week, month after month.
That sounds terrible to me, especially when there’s such a better alternative — trading.
When you engage in short-term trading, there’s no need to sweat small % moves in the overall market or major indexes.
Pay attention to them, sure, as these moves can lead to gorgeous setups in individual stocks.
But you don’t have to let the overall market control the direction of your portfolio the same way a long-term investor does.
As a trader, you control your destiny through the power of your near-term decision-making.
Is it easy? No. But if you work at developing a consistent strategy, the gains you can potentially make as a trader should outpace any long-term investor by leaps and bounds.
And in this market environment, where large-cap stocks are trading with penny stock volatility, you’d be a fool to avoid trading entirely.
The Advantages of Trading
Here are some of the clear advantages trading has (when compared to long-term investing)…
Quick Returns: Short-term trading can potentially offer quicker returns compared to long-term investing where you may have to wait decades for serious gains.
Capital Recycling: Traders can reuse their capital multiple times within a short period, potentially amplifying gains. Investors have their money tied up for years.
Leveraging Market Volatility: Short-term traders can potentially profit from market volatility by capitalizing on short-term price fluctuations.
Adaptability: Traders can quickly adapt to changing market conditions, modifying or reversing positions as necessary.
Entry and Exit Flexibility: Traders have the flexibility to enter and exit positions quickly, potentially limiting losses or taking advantage of brief opportunities.
Skill Development: Short-term trading can facilitate the rapid development of trading skills and knowledge, as traders are frequently analyzing markets and making decisions. In contrast, most everyday Americans who invest know little about the stocks they own or how the market works.
Liquidity Management: Short-term trading allows for better liquidity management, as traders can easily convert positions to cash.
Avoiding Long-Term Downtrends: Traders can potentially avoid long-term downtrends in markets or individual assets by employing shorter holding periods.
315% or 8000%?!
Let me tell you a brief story…
I started trading in 2010 with $50,000 of my Bar Mitzvah money.
At the time, the SPY was trading for $107. Today, it’s trading for $445 — a 315% increase in 13 years.
Had I simply done what most people do and dropped that money into the SPY, I’d have around $157,000 in my account today.
But by focusing on trading, I’ve turned that $50,000 into $4.1 million — an 8000%+ increase in the same period.
Are my results normal? No. Is it easy to make millions in the options market? Of course not.
Short-term trading isn’t for everyone…
But you wouldn’t be reading this if you weren’t ready…
Are You Ready To Level Up Your Trading Game?
Here’s the truth … I wouldn’t be a multi-millionaire if I hadn’t joined Tim Sykes’ Trading Challenge so many years ago.
And I want you armed with all of the tools necessary for success in the stock market.
So, if you’re passionate and dedicated, ready to take on anything the market throws at you, then I’ve got something for you…
My mentor, Tim Sykes, has helped traders learn to succeed for years. More than 30 of them (including me) are now millionaires.
Are you ready to take your trading game to the next level? Do you have what it takes to face the Trading Challenge?
Let’s find out…
CLICK HERE TO SIGN UP TODAY FOR ONE OF OUR FREE, LIVE TRAINING CLASSES!
I’m excited to see you there!