What is long term investment and short term investment in stock market, which is better

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An investment made with a plan of holding stocks for long period of time may be more than 3 years can be considered long term and less than that can be considered short term, many financial institutions also offer such services, it again differs from individual to individual and institution to institutions.

But here we only discuss about strategies individual investors can follow for better profits in layman terms.

For long term investments, it’s always better to buy stocks from companies which has good growth potential and which has impeccable financial record.

Already established companies don’t have much scope to further expand as it’s wings have already spread to every corner and it will be in the state of saturation, unless the company has scope to diversify and explore in new territories, the stock momentum remains constant, stable.

Where as the companies which are in nascent stage have very high probability of growing very big in shorter time and the stock value is expected to grow multifold, but here the role of management or leadership of the company is very important, companies in right hands goes places.

But while investing in growing companies, the financial growth of the company should be monitored carefully, it is advisable to be always in upward movement.

For short term investments, the sentiments of the markets can be considered, like if there is real estate boom, all the stocks related construction will be in demand, any pandemic, health services related stocks will be in demand like hospitals, pharma, likewise any ongoing events, stocks related to them will shine.

But it is advisable for any investor to keep a part of his funds in investment and a part in reserves, so any surprises investor can be prepared. Reserve funds will always come handy when market falls for averaging, or any good stock in consolidation mode, or new event and new demand of certain stocks.

Short term Investor should be very cautious of averaging, should avoid the itch to average at every fall, it should be done only at certain percentages depending on the value of the stock.

Financial and emotional discipline is very important for being a successful investor.

It is better if an investor can find a stock at low price, but it is also advisable not to wait if an investor trusts the worth of the stock, because some stocks keeping going forward, no looking back.

Be wise, Be a happy Investor.

Disclaimer:

Markets are subject to market risks.Stockvedam don’t advise or endorse any stock.Stock Market investment should be done with investor discretion. Stockvedam is not responsible for any losses incurred by the investor.The content at www.stockvedam.com is for informative purpose. Investor should do his own research while investing in stocks.


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