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Friday, 28 November 2014

Mid term investing - is this okay?

Long term investor or passive income investor normally frowned at those mid to much shorter term investor as the latter are considered trading rather than investing. 

This pre-judged labelling on those shorter term investors as trader is really an injustice to them.  There are many reasons for one to choose shorter investing duration. 

It is okay to take the money off the table when an investment is already in a profit position.  How much profit is ideal?  No hard rules here as the profit target is different for each individual investor.  Just need to ensure that the greed feeling is in checked.

Going for shorter term investing duration is really making sure that the money is working much harder for you.  Most share prices fluctuate; one moment you will experience a huge paper gain but the next moment in a bearish stock market then it can turn into a much lesser paper gain and even getting into paper losses situation.  Need to lock in the profit so that it will turn into bigger war chest for future investment opportunity or immediate re-investment opportunity appearing at your doorstep.  So why wasting away that huge paper gain.

The bigger one's investable funds the much faster to richness.  So when one has a much smaller investable funds than is it a goner case?  Fret not; in a shorter investing cycle one can be assured that each time a profit is booked than the proceeds can immediately be deployed back into other equally good investment opportunity. 

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