{"id":1219,"date":"2016-05-06T10:15:59","date_gmt":"2016-05-06T04:45:59","guid":{"rendered":"http:\/\/trucompare.in\/blog\/?p=1219"},"modified":"2016-05-06T10:16:38","modified_gmt":"2016-05-06T04:46:38","slug":"are-you-an-investor-or-a-trader","status":"publish","type":"post","link":"https:\/\/www.trucompare.in\/blog\/are-you-an-investor-or-a-trader\/","title":{"rendered":"Are you an investor or a trader?"},"content":{"rendered":"<p>Most of the people who put their money in the market, do not know if they are long term investors in the market or if they are short term traders. There are couple of differences between traders and investors that one should understand\u00a0before putting any money into the stock market (via equities or mutual funds).<\/p>\n<p>Traits of Investors<\/p>\n<ul>\n<li>Investors invest based on company fundamentals and have a deep knowledge about company fundamentals like its \u00a0business model, its growth potential, quality of the business and the management etc.<\/li>\n<li>Investors are usually contrary by nature- they buy value when others are selling in panic. They don&#8217;t believe in timing the market.<\/li>\n<li>Most of the good investors run concentrated portfolios and don&#8217;t have more than 20-30 stocks in their portfolios. This allows them to do deep research into few names rather than buy the complete market.<\/li>\n<li>Most of the investors hold the stock for a long period of time-usually more than 2-3 years. They are willing to suffer massive drawdowns (upto 50% of their capital) during bear market phases. As a matter of fact, they might add to their positions during downturns.<\/li>\n<li>Their market edge lies in picking good stocks and holding them for really long term. So imagine holding an infosys for 15-20 years and taking all those 2008 type corrections in your stride!<\/li>\n<li>The risk with fundamental investing is holding on to &#8220;wrong stocks&#8221; for long period of time. In the current scenario imagine the difference between holding PSU banks for last 5-7 years and holding private sector banks like Yes Bank\/IndusInd Bank for 5-7 years<\/li>\n<\/ul>\n<p>Traits of \u00a0Traders<\/p>\n<ul>\n<li>A stock trader usually trades based on price action and rides the market trends. His holding time can be few hours to few months.<\/li>\n<li>A Trader is essentually a market timer and tries to time the market in various time frames. He usually uses technical analysis tools\/charts as well as macro factors to take his trades. Many successful traders employ mathematical algorithms to make buy and sell decisions.<\/li>\n<li>A trader is not akin to using levearge to enhance his\/her returns during trending markets.He main objective is to ride the upside\/downside momentum in stocks.<\/li>\n<li>A trader practices strong risk managment and is quick to get put of losing positions. He is a master student of probability and is alsways listeing to the market sentiment.<\/li>\n<li>A trader is always looking for risk adjusted returns and is always looking to limit his drawdown during bear markets. Some traders might even go short during bear phases to profit from the same!<\/li>\n<li>His biggest strength is his ability to cut his losses which gives him an edge over the investing crowd!<\/li>\n<\/ul>\n<p>So are you a trader or an investor? Many times we enetr a market for short term gains but when we see a loss we turn into an investor and then end up owning dead stocks for long periods of time.On the other times- we say we are a long term investors but don&#8217;t have the patience to keep our good stocks for really long periods of time.<\/p>\n<p>So it is important to undersatnd your goals and objectives before you put any money into the market. And remember- no strategy will work all the time in the market.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Most of the people who put their money in the market, do not know if they are long term investors in the market or if they are short term traders. There are couple of differences between traders and investors that one should understand\u00a0before putting any money into the stock market (via equities or mutual funds). &hellip; <a href=\"https:\/\/www.trucompare.in\/blog\/are-you-an-investor-or-a-trader\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">Are you an investor or a trader?<\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[35],"tags":[],"class_list":["post-1219","post","type-post","status-publish","format-standard","hentry","category-investing"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p3wDt5-jF","jetpack-related-posts":[{"id":1236,"url":"https:\/\/www.trucompare.in\/blog\/mutual-fund-investing-how-direct-plans-can-enhance-your-returns\/","url_meta":{"origin":1219,"position":0},"title":"Mutual Fund Investing- How investing in direct plans can enhance your returns?","author":"Trucompare","date":"May 30, 2016","format":false,"excerpt":"If you go to any mutual fund website- you will see the same MF listed under \"Regular Plan\" and \"Direct Plan\". So you have a \u00a0ICICI Pru Discovery Fund- Direct Plan and ICICI Pru Discovery- Regular plan. So what exactly is the difference between the two plans and which one\u2026","rel":"","context":"In &quot;Investing&quot;","block_context":{"text":"Investing","link":"https:\/\/www.trucompare.in\/blog\/investing\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":877,"url":"https:\/\/www.trucompare.in\/blog\/top-retirement-plans-for-2016\/","url_meta":{"origin":1219,"position":1},"title":"Best Retirement and Pension Plans in India","author":"Trucompare","date":"January 2, 2016","format":false,"excerpt":"Best\u00a0Pension Plans in India \u00a0Retirement is a phase to enjoy freedom from work, engage in leisurely activities, pursue hobbies, embark on travel expeditions and basically do everything that you wanted to do but couldn\u2019t because of your active working years. But, to live a king-size life during your golden days,\u2026","rel":"","context":"In &quot;Retirement&quot;","block_context":{"text":"Retirement","link":"https:\/\/www.trucompare.in\/blog\/retirement\/"},"img":{"alt_text":"Retirement_Plans","src":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2016\/01\/Retirement_Plans.jpg?resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2016\/01\/Retirement_Plans.jpg?resize=350%2C200 1x, https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2016\/01\/Retirement_Plans.jpg?resize=525%2C300 1.5x"},"classes":[]},{"id":293,"url":"https:\/\/www.trucompare.in\/blog\/are-endowment-plans-any-good-for-wealth-creation\/","url_meta":{"origin":1219,"position":2},"title":"Are Endowment Plans, aka Traditional Life Insurance Plans, Any Good for Wealth Creation?","author":"Trucompare","date":"May 10, 2013","format":false,"excerpt":"Since most of the life insurance policies in India are still sold as \"savings and investment\", endowment plans( also known as traditional life insurance plans) are the most popular of the products. This trend was started by LIC of India ( oldest insurer in India) whose agents goaded investors to\u2026","rel":"","context":"In &quot;Endowment Plan&quot;","block_context":{"text":"Endowment Plan","link":"https:\/\/www.trucompare.in\/blog\/endowment-plan\/"},"img":{"alt_text":"TruCompare_head","src":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2013\/05\/TruCompare_head.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":31,"url":"https:\/\/www.trucompare.in\/blog\/best-term-insurance-in-india-2013\/","url_meta":{"origin":1219,"position":3},"title":"Term Insurance Comparison &#8211; Which is the Best Term Insurance Plan in India?","author":"Trucompare","date":"September 7, 2013","format":false,"excerpt":"Term Insurance Comparison In earlier posts, we have looked at various criteria that can be used for term insurance comparison. Although it is difficult to say which is the best term insurance plan in India, one can keep the following policies in mind before making a buy decision. HDFC LIFE\u2026","rel":"","context":"In &quot;Term Insurance&quot;","block_context":{"text":"Term Insurance","link":"https:\/\/www.trucompare.in\/blog\/term-insurance\/"},"img":{"alt_text":"TruCompare_head","src":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2013\/05\/TruCompare_head.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":641,"url":"https:\/\/www.trucompare.in\/blog\/best-term-plans-in-india\/","url_meta":{"origin":1219,"position":4},"title":"Best Term Insurance Plans in India- A quick comparison","author":"Trucompare","date":"March 26, 2015","format":false,"excerpt":"\u00a0 Best Term Insurance Plan Please see an updated version of the comparison here-\u00a0IRDA Claim Settlement Ratio for 2015 - Compare best online term insurance plans As online term plans have gained popularity, almost all the life insurance companies have come up with their online term plans and claims to\u2026","rel":"","context":"In &quot;Term Insurance&quot;","block_context":{"text":"Term Insurance","link":"https:\/\/www.trucompare.in\/blog\/term-insurance\/"},"img":{"alt_text":"TruCompare_head","src":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2013\/05\/TruCompare_head.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":94,"url":"https:\/\/www.trucompare.in\/blog\/product-review-aegon-religare-term-plan\/","url_meta":{"origin":1219,"position":5},"title":"Aegon Religare Term Insurance Plan Review by TruCompare","author":"Trucompare","date":"May 6, 2013","format":false,"excerpt":"Company:\u00a0Aegon Religare Life Product Name-\u00a0iTerm Product features: Minimum sum assured of 10 lakhs Available up to 40 years duration Maximum Age - 75 years Company's pitch: Availability of additional riders- Accidental Death, Critical Illness etc. Our view: PLUS- Aegon Religare has lowest premiums in the market. MINUS- IRDA claim settlement\u2026","rel":"","context":"In &quot;Aegon Religare&quot;","block_context":{"text":"Aegon Religare","link":"https:\/\/www.trucompare.in\/blog\/term-insurance\/aegon-religare\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/posts\/1219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/comments?post=1219"}],"version-history":[{"count":5,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/posts\/1219\/revisions"}],"predecessor-version":[{"id":1224,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/posts\/1219\/revisions\/1224"}],"wp:attachment":[{"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/media?parent=1219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/categories?post=1219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/tags?post=1219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}