Buy_and_Hold_Pennies

[TooFrank]

3 Facts of Life Short-Term Traders Need to Accept


Short term investors are competing against their peers for a small percentage of the pie. It is not a zero sum game. Someone has to lose for someone else to win. Uncle Sam and state get their %30-%50 cut off the top. So that means just to break even, not counting trading fees, a short term trader has to better 70% of their trading peers constantly and consistently. These factors are why only 2-3% of short term traders are profitable on the up and up per individual. Not considering trading cabals, manipulation and insider trading.

Long term investors are making a bet with or against the company with less of a tax burden.

Jordan Wathen:
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A good stock will have its bad days, weeks, and even years, but in the long haul, its performance will closely match the performance of the business.

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Jordan Wathen: Legendary investor Ben Graham once wrote that "In the short run, the market is a voting machine but in the long run, it is a weighing machine."

That is to say that stock prices are guided by popular opinion in the short term, but over the long haul, performance is much more precise. A good stock will have its bad days, weeks, and even years, but in the long haul, its performance will closely match the performance of the business.

Taking short-term positions in stocks may be the most difficult method for making money in the stock market. Sure, the rewards are huge -- you can make a lot of money very quickly by getting the market's reaction to earnings reports right. But doing so is almost impossible to do repeatedly. You'll have to predict the reaction of emotional people making emotional decisions about a company based on a few data points.

It is much easier -- and financially more rewarding, according to piles of studies on investor behavior -- to simply buy stocks you like and hold them for the long term. Almost universally, more activity leads to worse investor performance.

https://www.fool.com/investing/general/2015/07/19/3-facts-of-life-short-term-traders-need-to-accept.aspx