24-01-2014, 04:54 PM
(23-01-2014, 12:14 PM)Bibi Wrote:(22-01-2014, 04:48 PM)arriyana Wrote: I was an active trader for about 4 years and made a decent amount of profit. But every day, I sleep with great worry and consistenly checking the share prices because of my trades. Because there are no rationale for a trade, merely a gut feel or a technical trend that could go either way, I was always on my toes.So which method yields higher returns for you over say a period of 4 years? Active trading or value investing?
Since I moved over to value investing, it had helped to reduce the fear by a great deal because I know I have a reason for investing in a particular share with a margin of safety. (Recommend reading Benjamin Graham Intelligent Investor. It's a great book). I function much better daily with value investing.
This is quite a difficult question to answer.
Even as value investing, you don't escape the erratic movements of the market. As Walter Schoss (he is one of a legendary value investor) put it, 70-80% of his gains are made in 10% of the time invested. Stocks tend to jump or plunged quickly. Technically if you are an active trader and catch that 10% of the movement, you can make a lot more returns than value investors. But the question is, can you really catch that small slice of the action time?
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