Difference between Investment and Trading

People who are experienced in the financial markets always distinguish between trading and investing.

In short, traders are looking for short-term profits and investors are looking to take part in the capital appreciation that happens over the long-term.

Mutual funds, Fixed Deposit and long terms investment picks up in the financial market is a favorite among investors. In a fixed deposit, the investor simply deposits his or her money, and then sit back and enjoy the capital appreciation that naturally happens over years.

Traders, on the other hand, are typically present in the forex market, options, commodity futures, crypto currencies and other asset classes that do not necessarily appreciate over time. However, these markets are known for their volatility, which creates opportunities for people who know how to take advantage of short-term price fluctuations.

In Short, Traders looks for opportunity in all aspect of financial markets especially in short terms, whereas investor’s looks for capital appreciation over an period of time usually preferred investments.