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While this is an investing course, the difference between trading and investing comes up pretty frequently and so I’m going to use this lesson to clarify between the two!

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What investing is

The goal of investing is to build long term wealth by buying stocks, funds, bonds and other investment types and holding on to them for an extended period of time. With this approach as an investor, your earnings are achieved from compounding, reinvesting your profits and dividend payments.

What trading is

Trading, on the other hand, involves the more frequent buying and selling of stocks and other types of investments with the goal of generating returns that outperform the stock market. With trading, profits are made by buying investments at a lower price and selling at a higher price over a short period of time. 


I do not recommend trading unless you have plenty of time to dedicate to tracking your investments on a daily basis (multiple times a day as matter of fact) and trading in itself requires it’s own skill set and research which you need to have before participating in this type of investment strategy.