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Is Active Trading The Answer? |
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One of the main reasons many of us get into investing is to become financially independent. Who isn't trying to amass a portfolio with enough income to ensure that we don't have to work when we should be playing golf or traveling the world. While there are several strategies to invest, is active trading one of the ways to become a millionaire?
For those investors who want to achieve that million dollar portfolio, you may want to read The Millionaire Next Door by Thomas Stanley and William Danko. While it wont help you identify great stock picks (but investorandtrader.com can help), it will help you to establish the difference between those who dream of having a million dollar net worth, and those who do it. You may be surprised at the answers.
While I won't give away all the secrets, I will share one of the surprising findings which impact investors over the long term.
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95% owned stocks
9% of investors held for less than 1 year
1% held for a few days
1% held for a few weeks
7% held for a few months
Less than 10%, less than 1 in 10 people with net worth of $1 millionaire or more actively trade their portfolios. Most definitions of active traders would mean that 1 in 100 are active traders. 99% of millionaires do not actively trade their positions. They hold for long periods of time. They find good companies and let the companies make them money.
The biggest problem with active trading is the commission, and the taxes. Your brokerage gets paid whether you make money or not. Making the presumption that you're trading with a discount broker, you're paying $20 ($10 to buy, $10 to sell) each time you trade.
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Untitled Document
Free, concise guide to discount stock broker selection and efficient online share trading in bear markets and how to profit from disciplined investing plans
MONTREAL, Nov. 19, 2008 -- Stock-Trak Group , www.stocktrak.com, is pleased to announce the successful completion of the International TradersExpo/Wall Street Survivor $1 Million Equity Trading Challenge, a white label fantasy stock market challenge based on Stock-Trak's highly popular Wall Street Survivor online trading simulation platform.
Nov. 20 (Bloomberg) -- U.S. options trading slowed this month from a record pace after hedge funds collapsed and the biggest market swings since 1929 made equity derivatives too expensive to be used as insurance against stock losses.
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