What makes a trader different from an investor?

Julie Brownlee, Fsp Invest, 11 Jun. 2014

Tags: trader, investor, trading, investing, what is a trader, what is an investor, difference between trader and investor,



You’ll have heard the words investor and trader bandied about. But what exactly is the difference? Which category do you fall into? Or are you a bit of both? Let’s take a closer look at the major differences…



What is a trader?


Generally a trader is someone who gets in and out the market quickly hoping to make quick profits. In the majority of cases this will also involve the use of geared products, such as single stock futures and contracts for difference.

For example, a trader will put a trade on with a view of keeping it open for the short-term. This could be anything from a couple of hours to a few weeks.

A trader is more likely to take on higher levels of risk.


What is an investor?


An investor is someone who puts money into the stock market or other investments with a more long-term view.

For example, an investor will buy a portfolio of shares with the view of holding these shares for a minimum of five to ten years.

An investor is less likely to take on high levels of risk.


So what are the differences between a trader and an investor?


As you can see above, the major differences are the length of time in the market and the instruments used. And this means the risk levels undertaken are higher by a trader than an investor.

SARS also treats the tax payable on gains differently depending on whether you’re an investor or a trader.

*********** New release ************
The most important pattern your financial advisor won’t show you…

Could Make You Rich!

Most financial advisors – The kind that sell you life insurance and expensive pension plans - Won’t ever show you this pattern.

Why would they when you could use it to find lightning fast gains like 74.51%, 27.55%, 19.94% and 15.38% in a matter of days!

Click here to start profiting from this pattern TODAY!
**********************************

Gains made by traders form part of their income for the year and as such income tax may be due. Longer-term investors may have to pay capital gains tax on their profits.

Perhaps you can ‘label’ yourself with one of these descriptions. Or perhaps you’re a bit of both.

So there you have it, what makes a trader different from an investor.


Related QA

Pic
d.c.heger asked:
MY QUESTION IS – I bought Bitcoin & Etherium some time ago – at first they grew nicely but now they are lower than what I paid for them. Should I [read more]
Published at 04 Apr. 2018 in: Investing 5 shares due to rocket 1 Answer
Pic
kavesh.maharaj.73 asked:
Hi Josh. I would like some advice on TFSA. I can get an interest rate of 7.8% nominal at a bank if I invest the R33k upfront in a fixed deposit [read more]
Published at 19 Mar. 2018 in: Investing Tax free savings vehicle 2 answers
Pic
kavesh.maharaj.73 asked:
Hi Josh Quantum wants to buy back shares from shall investors at what I think is a low price of around R3.86. You tipped the share in February [read more]
Published at 14 Mar. 2018 in: Investing Real wealth 5 answers
Pic
elizastrydom asked:
Hi Timon I am interested in registering for your Red Hot Storm Trader service. I am already a Red Hot Penny Shares investor. My question is [read more]
Published at 28 Feb. 2018 in: Investing Trading platform and broker 1 Answer
Pic
ManuE asked:
I have an interest in investing in Bitcoin, I just don't know how. If I buy Bitcoin with R15 000, how much can make (Return On Investment)? [read more]
Published at 25 Feb. 2018 in: Investing Investment 1 Answer

Related articles:


Latest:

Comments
0 comments



 
 


Youtube Twitter Facebook

Connect with us:    

POPULAR TOPICS
  • Accelerated Investor