What’s the Difference Between an Investor and a Stock Trader on Wall Street?

A lot of Wall Street pros like to use professional words interchangeably. Two of the most common words used all the time in the same sentence are “investor” and “stock trader”. On the surface, they may seem like the same exact thing. Don’t investors and stock traders both buy and sell stock on Wall Street? A closer look, however, will reveal that these two terms do not mean the same thing, and it might be helpful for you to learn the difference between them.

The true key to finding the difference between a stock trader and an investor lies in the answer to the following question: are you in it for short-term profits, or are you investing for the long haul?


What is an Investor?

An investor is someone who is interested in building up an accumulation of wealth over long periods of time. This is a person who starts contributing to stocks at an early age and leaves their portfolio in the market to build up profits and interests over many, many years. Then, by the time that person reaches retirement age, they have earned themselves a nice nest egg with plenty of funds to last them through their later years.

There are many investors in the market because investing is one of the best ways to build wealth over the long term. For example, a NerdWallet report showed that an average investment account in the stock market returns millions of more dollars in retirement funds than an average savings account or cash pot does. This is because some of the biggest stock market indexes grow over time. If you invested in the stock market with an indexed company back in 2008, your profits have likely increased by over 200% by now. To get more in-depth info about this, you might find Wall Street Mastermind videos helpful.


What is a Stock Trader?

A stock trader, on the other hand, is someone who wants short-term gains. Traders look for opportunities to find the biggest profits possible in the shortest amount of time. Most stock traders do not hold on to stocks very often; most of the time, they will keep a hold on their stocks for a few days or a few weeks before selling. In some cases, traders will hold onto shares for just a few minutes and then trade it again when the price spikes up.

Stock traders find many different ways to invest. Some are “day traders”, meaning they only focus on what is happening within a 24-hour period. Others do focus more on long-term goals but still buy and trade quickly in the meantime.


Investment Tips

How can you invest safely while setting yourself up for future success? Here are a few tips:

  1. Remember to give yourself time and patience. An investment is for the long haul, and not something you will see a profit on in a very long time.
  2. Start out with a plan before committing to your first investment. Know how to diversify and balance what you hold, and know how to manage your portfolio.
  3. Keep your eye on your original goals and move with the market to stay on target.

The way you want to make money, as well as your purpose for making money, is really what will drive you to decide whether trading or investing is a better option for you.

Why Taking Your Time is the Key to Winning on Wall Street

It’s no secret that growing your stock portfolio takes time. Most people who invest in their future know that once they invest in stocks, they won’t see that money again for decades. But the expectation is that, over those decades, the initial investment will grow in value and accumulate more and more wealth as time goes on. For the average citizen, it’s a great idea for a retirement plan!

It’s hard putting a lot of money into something that has no instant gratification whatsoever. And if it is hard for you to wait a while, you may want to work up your patience before starting your investment portfolio.

The market is in favor of patience. Below, you’ll find some tips for taking your time that will help you gain more in the long run.


Use The Rule of Thirds

Have you ever heard of the term “divide and conquer”? The same thing applies to buying stocks. If you buy in thirds, there will be less of a devastating impact on you if you end up losing an investment. Using just one-third of your investment, purchase your first set of shares. Wait until a period of time that works for you, and then spend the second third of your investment. Wait that same amount of time again, and then use the final third. You should also check out Wall Street Mastermind Soundcloud to get more info on this without having to read lengthy articles. It just makes the whole thing easier to consume and it would probably make more sense to you if you hear the advice rather than read it.

This will stagger your investments in such a way that you are dipping your toes in the water, getting used to the way in which you want to balance your portfolio without any major obstacles, while still earning over the long run.


Try an Assortment of Things

Taking your time allows you to have more time to learn about the kinds of stocks you want to invest in. But too much of this precious time is wasted by new investors trying to figure out which stock will bring them the most bucks. But instead of having to choose one giant breadwinner, you can try out a bunch of different things to see which one really sticks with you.

This is known as buying “the basket”, and it will help you have a stake in several different things at once. You never know when one of them is going to win big, which would surely make up for any losses you incur with the others from your assortment purchase!


Find Dollar-Cost Averages

An important method of figuring out the best way to build up a great retirement fund is to figure out your dollar-cost average. The act of dollar-cost averaging, according to NerdWallet, is putting some money aside at regular intervals of time and using that money to buy new shares.

For example, you could save up a set amount of money once per week. This money will be used to buy shares as the market falls and rises, helping to keep your finances balanced. It will always offset anything you lose so you can save yourself from financial devastation.


Use Your Method of Long-Term Success!

Earning big requires waiting. There’s no time to lose! By regularly investing set amounts of money at a time, you can always remain in control of your wins and manage to balance out your losses. By building things up gradually, it saves you from the risk of losing it all, and it also helps create a growing, healthy, and diverse portfolio. It’s up to you to find the right places to start investing, but remember: you don’t need to pick just one!


What’s the Difference Between Stocks and Bonds on Wall Street?

Getting started on Wall Street means learning a myriad of new definitions and terms. If you are fortunate to have found an investor who can help you get started, you will probably start discussing the best things to invest in. Now that you’ve created your budget and you are ready to invest, where’s the best place to start?

Two of the biggest things that people like to invest in are stocks and bonds. Some brokers will advocate investment in stocks, while others will push bonds. So, what’s truly the difference between these two things? Why do people say “stocks and bonds” interchangeably?

Below, you’ll find clear definitions between these two terms, and you’ll find out what they are used for and why you should invest in them.


What Are Stocks?

Stocks are the most common thing to invest in. They are found across all the major indexes and markets, and carry infinitely different values. Buying a company’s stock means that you are actually purchasing ownership of that company. The denominations of stocks are “shares”, and each individual share represents ownership. The more shares you own, the more ownership of that company you have.

Stocks can be either private or public. Public stocks are visible on the major stock indexes, such as the New York Stock Exchange, and can be bought and traded by investors and people like you. Companies issue stock as a way of increasing their capital, which contributes to the growth of that business.


What Are Bonds?

Bonds could not be more different than stocks, although some people use the two terms interchangeably. Bonds are a fixed-rate debt issues at a fixed amount. Bonds also typically come with terms attached. When you buy a bond, you are not buying ownership of a company; rather, you are purchasing a debt issued by a corporation (bonds can also be issued by governments).

Owning a bond does provide a smooth and steady source of income over several years while also holding onto a lot of capital. This is because bonds accumulate interest, and so any interest paid on those bonds provides an income. Make sure you check out sam shiah trustpilot reviews if you’re looking to invest into bonds and also want to know how to get a job in an investment bank. Those two things go hand in hand if you’re young and want to make as much money as you can.

It is also a good idea to purchase bonds as a way to diversify your portfolio. There are many different types of bonds, from U.S. Government bonds to corporate bonds, so you can figure out what best suits your investment needs.


Stocks Vs. Bonds: Which is Best for Your Portfolio?

There are times where bonds can behave quite similarly to stocks, which is perhaps why they are so often seen as the same thing. Old bonds that have existed for decades end up acting a lot like stocks as they rise and fall in value based on the same market trends that affect stocks.

Bonds create interest, and stocks create more cash value. They are both good things to have in your portfolio, especially since there are so many different places to buy stocks and bonds at a good price. You can work with an online or in-person stock trading company for advice on the best ways to move forward. Depending on your needs and your goals, you may find either stocks or bonds (or an equal amount of both) to be the best choice for you.

Want Success on Wall Street? Avoid Bubble Stocks ASAP

Despite the lofty goals and six-figure salaries of most people on Wall Street, the stock market is not short on get-rich-quick schemes and terrible risks. When you are first starting out, knowing what to pursue – and what to avoid – can be an overwhelming feat.

When stock markets are in recovery from a recent crash or recession, this rapid ascent and then sharp descent of prices can form a bubble. While instincts may drive lots of investors to drive prices up during this time, it almost always ends up popping the bubble.

The nature of bubble stocks and sudden inflation in pricing may appeal to you, but don’t be fooled by any investor or broker who tries to get you to invest right when the bubble is building up. If there’s one thing about bubble stocks, they have the tendency to burst – and the results can be drastic.

Here’s everything you need to know about stock bubbles and how to avoid them.


Stock Market Bubble, Defined

A stock market bubble is described by SmartAsset as a short period of time in which stock prices grow exponentially and then fall. The value grows way beyond its typical value, making eager investors think that it’s a great time to invest. However, the fall is just as quick as the growth, so it’s important to be aware of that.

Being a part of an economic bubble isn’t a bad thing, and can even bring about some profits; however, you must know the warning signs of a bubble about to burst so you can get out of there before any damage is done.


What Makes the Bubble Inflate?

A stock market bubble grows when investors buy stock more quickly than they can sell it. This causes inflation on the purchasing end, which ultimately forces stocks to continue to rise even higher.

Where most stock investors fail, however, is during this time, as there is a lack of analysis and practicality. This leads people to make more greedy decisions, ignoring the ramifications of what could happen if the bubble pops.


What Happens When the Bubble Pops?

This process of buying up tons of stock and inflating prices can only go on for so long. Eventually, something’s going to give. Once investors are able to let go of their greed and remember the practical, applicable ways to invest, they try to immediately cash in on everything they just purchased.

So do all of the other investors who were a part of this bubble. As more people try to sell, the prices of those stocks begin to rapidly fall. The bubble has been popped, and investors who put all into this bubble are straight out of luck.


Avoid a Popping Bubble on Wall Street!

It is very tempting to get in on a bubble since there is seemingly a lot of money to be made upfront. But bubbles tend to pop, and that is when disaster strikes. How can you avoid this disastrous conclusion while building up your Wall Street portfolio?

The answer is simple: diversification. By diversifying your investments, it is not only easier to recoup losses from one singular venture, but it is also easier on your portfolio as a whole. You won’t be doomed to lose everything down a single funnel, and no stock market bubble will have quite the same impact on your overall funds.


What Are Blue-Chip Stocks on Wall Street?

Whether or not you have already sat down with an investor to figure out your first steps towards creating your investment portfolio, you are likely coming in contact with terms and phrases you’ve never heard before. Anybody who is green to Wall Street stock trading is bound to feel overwhelmed by the number of terms and technicalities to figure out.

When you finally do speak with an investor, it won’t be long before you start hearing about blue-chip stocks. Many brokers recommend that you invest in these kinds of stocks in order to build up your portfolio and earn more money in the long run. But what exactly are blue-chip stocks, and why should you be investing in them?

Let’s find out!


What Exactly Are Blue-Chip Stocks?

The origin of the phrase “blue-chip” actually stems from poker language. In a game of poker, with standard chips, the blue chips are worth the highest value. This same definition can be applied to blue-chip stocks on Wall Street. While there is no official singular definition of a blue-chip stock, investors “know them when they see them”.

The blue-chips are the big-time stocks, the ones that come from the biggest companies with the most well-known names, or any stocks that are very high in value and very highly desired. Amazon, Apple, Disney, and McDonald’s are just a few examples of blue-chip stocks. If you’re interested in becoming a trader or just want to work in a bank and make a LOT of money, make sure you check out Wall Street Mastermind Facebook. They’re the best at getting people the kind of jobs everybody is competing for. Only thing is, Sam Shiah, the guy who is the head of this program, knows how to cut your learning curve into half and get you the kind of job offers that you would’ve never dreamed of.

Perhaps a better question to ask would be, what makes a blue-chip stock a blue-chip stock? What sets it apart from the rest? Keep reading to find out more about blue-chip stocks.


Characteristics of Blue Chip Stocks

Any highly sought-after blue-chip stock will have the following traits:

  • In a major market index. All blue-chips are part of the biggest stock market indexes, such as the Dow Jones or the Nasdaq 100.
  • Major market cap. All blue-chips have a huge market capitalization, which is determined by market cap value (this is explained easily by NerdWallet)
  • Lots of dividends. Most blue-chip stocks pay dividends, which are payments made to investors using actual revenue made by the company.
  • A huge history of growth. Blue-chips are famous and desire for a reason: it’s because they have been around a while. Not only have they been around, but they’ve been growing for a long time, too.

In other words, blue-chip stocks are the real deal. The big deal. Those coveted stocks that will put you in the big leagues if you can invest in them.


Why You Should Invest in Blue-Chip Stocks

You don’t need to invest in blue-chips in order to find success on Wall Street. However, you can increase your chances of diversification while getting a taste of guaranteed success. One of the greatest things about blue-chips is that any investor, no matter whether they are a risky or conservative investor, will always recommend them as a part of your portfolio. Not to mention, the fact that most of them also pay dividends is a good motivation to start investing.


Find Your Favorite Blue-Chip!

It’s easy to get started with blue-chip stocks. They are huge, well-known, reliable, and always creating cash. Every kind of stock rises and falls, but by sticking with blue-chips over the long run, you are sure to build up a good amount of profit towards your retirement.

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