Is long-term value investing more profitable than shorter-term trading?

Discussion in 'Economics' started by learner88, Dec 29, 2017.

  1. tomorton

    tomorton


    Important for learner88 who put up the original question, and for those responding, if we are to have a sensible debate.
     
    #11     Dec 30, 2017
  2. NY_HOOD

    NY_HOOD

    The overwhelming majority of investors/ traders do MUCH better by investing long term. That is a fact. Short term trading is too emotionally driven. Even if you did have a winner, how many times did you say to yourself “ i should of held longer “?
    Get a job doing something you enjoy( not gambling) and invest in various funds, you will do well. All the ups and downs with daytrading causes extreme stresss on marriages and also causes depression. Ive seen many traders on the brink of suicide and im not kidding.
     
    #12     Dec 30, 2017
    cvds16 likes this.
  3. sle

    sle

    Obviously, you are making the assumption that you have everything that it takes to become the next Maria Sharapova. I am pretty certain it's not true (I've never seen you but I am sure she has nicer legs), plus it's important not to discount the value of luck along the way to the great success.

    On topic now :) First of all, it's very hard to separate "trading" from "investing" and any cutoff will be arbitrary. If you go down the passive vs active road, there is value to both and it's worth combining them if you have the expertise and the time. Second of all, active investing/trading naturally incorporates frictions and those things add up very quickly (btw, one of the arguments against robe-advising services like Betterment is the transaction costs).
     
    #13     Dec 30, 2017
    ironchef, Gambit and cdcaveman like this.
  4. Bobbybax

    Bobbybax

    Long term investing benefits greatly from preferential tax treatment.
     
    #14     Dec 30, 2017
    cdcaveman likes this.
  5. You haven't seen me play tennis yet... :)
     
    #15     Dec 30, 2017
    Gambit likes this.
  6. Gambit

    Gambit

    Isn't there a U shape to the time frame in terms of optimal profitability? And isn't it relative to the liquidity in the market? The only study I've come across is in Rob Carver's book. Sharpe ratio is improved by moving to a shorter time frame. Swing trading seems optimal for retailers but not daytrading. The costs of daytrading are too high to overcome. The results of daytraders are definitely not good according to O'Dean and other academics.
     
    #16     Dec 30, 2017
    cvds16 likes this.
  7. Gambit

    Gambit

    #17     Dec 30, 2017
  8. Gambit

    Gambit

    #18     Dec 30, 2017
    MACD and cvds16 like this.
  9. Gambit

    Gambit

    And make sure to take whatever "supplements" Sharapova is taking :)...to even the odds.
     
    #19     Dec 30, 2017
  10. comagnum

    comagnum

    The more savvy traders these days diversify through various holding frequencies and across many domestic & foreign trading instruments. This goes contrary to the group think - the one trick pony's parroting the trading techniques that don't stand the test of time.

    For example when the market has been at 5 year lows after the crowd pukes out, and a base emerges, they adapt with the changing market conditions into value investing with a portion of their capital and will still trade shorter and intermediate time frames as the new bull market plays out.

    ent.
     
    Last edited: Dec 30, 2017
    #20     Dec 30, 2017