Investor

Investor

An investor is someone who spends capital with the expectation of financial gains or returns. This spending is called investment.

What is the difference between investors and traders?

The difference between a trader and an investor can be seen as the difference in the time frame. Investors tend to hold assets for longer periods of time than traders.

Another difference is that as a trader, you are working with your trading capital that often is a smaller part of your total net worth. Many investors, though, invest large parts of their net worth. A good example would be buying a house. Often, people take on debt in order to buy a house, so their investment might be even larger than their net worth.

Every investor has a vested interest that the company, asset or project thrives. Active investors might use their voting rights to influence the way a company is being run.

Investors typically try to build a diversified portfolio of financial products such as such as stocks and shares, bonds, derivatives or funds. Other forms of investment include real estate and commodities, such as gold.

At tradimo, we want to be a great community for both investors and traders. In fact, we think that being a trader – and be it just on a small scale – helps you become a better investor. Similarly, being an investor helps you become a better trader, because the skills needed overlap and benefit each other.

A small example on this view:

Say you are utterly convinced of the business model of a specific company. Logically, you want to buy their shares. With the skills you acquire as a trader, you will find the best spot to do that. And you might even benefit from temporarily going short on your dream company. Not because they will not succeed in the long run, but because you might be convinced that currently, the stock of the company is overpriced.

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