Two investing approaches
I’m reading quite a bit about investing, and I see 2 philosophies emerging. People seem to be split into distinct groups:
1) Invest for short-term gains: buy and sell stocks frequently, or
2) Invest for long-term wealth accumulation/dividend payouts: buy once and hold for years/forever.
At the moment – since I have no significant experience with either – I find both ways attractive. Every book I read defends the author’s point of view, but I’m interested in trying out different techniques and seeing what works for me.
Of course, reason tells me that I should follow the advice of people like Warren Buffet and all other wise investors with proven track record. They all recommend investing for long-term. But I have too little patience and too much curiousity to stick to just this approach alone.
I’ll add $3,000 to my “play money”, and will allocate 1/2 to short-term trades, and 1/2 to long-term investments. I doubt I’ll get rich by investing so little, but percentage of return over the next year or so should hopefully tell me how good I am at picking stocks, and which techniques I’m having more luck with.