Stock Speculator Vs Stock Investor
Stock speculators are often ambiguously categorized as stock traders, if trading in that capacity, as it sounds more acceptable to the general public. Individuals or firms trading equity (stock) on the stock markets as their principal capacity are often called stock traders. Stock speculators usually try to profit from short-term price volatility with trades lasting anywhere from several seconds to several weeks.
The stock speculator is usually a professional. Persons can call themselves full or part-time stock traders/investors while maintaining other professions. When a stock speculator/investor has clients, and acts as a money manager or adviser with the intention of adding value to their clients finances, he is also called a financial advisor or manager. In this case, the financial manager could be an independent professional or a large bank corporation employee. This may include managers dealing with investment funds, hedge funds, mutual funds, and pension funds, or other professionals in venture capital, equity investment, fund management, and wealth management. These organized investors, are sometimes referred to as institutional investors. Several different types of stock trading strategies or approaches exist including day trading, trend following, market making, scalping (trading), momentum trading, trading the news, and arbitrage.
On the other hand, stock investors are firms or individuals who purchase stocks with the intention of holding them for an extended period of time, usually several months to years, for passive income objectives such as dividend accumulation. They rely primarily on fundamental analysis for their investment decisions and fully recognize stock shares as part-ownership in the company. Many investors believe in the buy and hold strategy, which as the name suggests, implies that investors will buy stock ownership in a corporation and hold onto those stocks for the very long term, generally measured in years. This strategy was made popular in the equity bull market of the 1980s and 90s where buy-and-hold investors rode out short-term market declines and continued to hold as the market returned to its previous highs and beyond. However, during the 2001-2003 equity bear market, the buy-and-hold strategy lost some followers as broader market indexes like the NASDAQ saw their values decline by over 60%.
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Famous quotes containing the words stock and/or speculator:
“I have, thanks to my travels, added to my stock all the superstitions of other countries. I know them all now, and in any critical moment of my life, they all rise up in armed legions for or against me.”
—Sarah Bernhardt (1844–1923)
“Beautiful credit! The foundation of modern society. Who shall say that this is not the golden age of mutual trust, of unlimited reliance upon human promises? That is a peculiar condition of society which enables a whole nation to instantly recognize point and meaning in the familiar newspaper anecdote, which puts into the mouth of a distinguished speculator in lands and mines this remark:M”I wasn’t worth a cent two years ago, and now I owe two millions of dollars.””
—Mark Twain [Samuel Langhorne Clemens] (1835–1910)