Short-term investors make money by trading in and out of stocks over a short period of time rather than buying and holding them for several years. While you certainly can make money doing this, the problem is that no matter how skilled at trading you become, there will always be a big element of luck involved. For beginner investors, especially, short-term trading comes down almost entirely to luck, and you can easily lose as much or more than you profit.
Although some people experience success from short-term trades, this isn’t the type of investing that benefits most people, and this isn’t the type of investing I teach. Investing shouldn’t be used as a get-rich-quick scheme or a gambling game, but rather as a way to consistently grow the wealth you already have over the long-term. With long-term investing, you are able to minimize your risk and negate the sometimes-crushing effects of short-term volatility and price-drops. This involves letting your money compound in the stock market over 10 and 20 years.
I get it. Growing your wealth over a few decades doesn’t sound all that glamorous, but trust me, long-term investing, the Rule #1 way, is how people retire rich.
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Step 3: Determine Where to Invest Your Money
After you feel comfortable with the level of help you have decided to take or not to take and the amount of money you want to invest, it’s time to decide where to invest your money—for the long term. When deciding where you should invest your money, you’ve got plenty of options