One big question we’re often asked…
Is Tykr used for investing or trading?
Short answer…
- Investors use Tykr to make money over the long term.
- Traders use Tykr to create a short list of stocks to make money over the short term. Example: Reduce 100 trade ideas down to 10.
With that being said, there are risks and differences between investing and trading. Also, #5 is an important quote from Warren Buffett.
1) Time
Have you ever heard the quote “Time in the market” vs “Timing the market”?
- Time in the market = Money is working for you (This is an investor mindset)
- Timing the market = You are still working for money (This is a trader mindset)
2) Consistency
- As a trader, you may be buying and selling stocks every day (day trading) or over the span of several days (swing trading). Some days you’ll make money, and some days you’ll lose money. In summary, trading does not produce consistent positive returns over the short term.
- As an investor, you’re letting compound interest work for you over weeks, months, and years. As you’ll learn in the onboarding, if you buy On Sale stocks, you have a high probability of making great returns over time.
3) Risk
- Trading is known to be high-risk. This article on LinkedIn explains why 99% of traders lose money. Trading is a zero-sum game because you are “trading”. One person is buying from another person. One person claims a profit while the other person claims a loss.
- Investing is low-risk if you have the right tool. In your case, you’re using Tykr, so you’re in the right place. On top of that, everyone can win by investing. If one million people invest in a great stock, all one million can profit if the share price increases. This is one of the many great benefits of investing.
4) The number of billionaire investors vs billionaire traders
- How many billionaire investors vs billionaire traders are there? Long story short, there are zero billionaire traders. On the other hand, there are around 3,000 billionaires in the world who are primarily composed of stock investors, real estate investors, and entrepreneurs. Learn more here on Forbes.
5) What does Warren Buffett have to say about trading?
Here are three famous quotes from Warren Buffett that relate to investing vs trading.
- “Focusing on daily price quotations is a terrible way to invest in businesses.”
- “The stock market is a device for transferring money from the impatient to the patient.”
- “Our favorite holding period is forever.”
Important notes
- Respectively, we have nothing against trading, but we do have a responsibility to outline the risks and differences.
- If you do decide to trade, please make sure you have proper training with a platform, organization, association, or teacher.