Generally, the investors are not in a rush like traders. Usually, they deploy an intelligent investment strategy and that is it. They let the time and market environment take care of the rest like a farmer who sows a good seed onto a fertile land in a right season.A sophisticated investors invest in companies that pay dividend. Sometimes, they combine growth and income investing strategies to create a kind of money machine through a dividend reinvestment plan (DRIP).
Contrary to an excellent swing trader that is still losing because of the inappropriate stop losses, an investor can afford to hang on to those paper losses before they turn into profit. Also, a swing trader who is under pressure (because of the price-action is coming near the stop losses) may be forced to cut losses before all is gone in a split of second.
An smart investor is usually compensated with juicy dividends.
Note that some companies do pay dividend every quarter. That is really good for income investors.
Imagine that a company that regularly pays dividend finds its stock decline from $40 to $10. After, a thorough investigation, one realises that the decline was unjustified because of the fundamentals and market cycles.
Now close your eyes and take a deep breath. Good! If the company kept paying 20 cents dividend per share each quarter, how much annual dividend is that? If your eyes pop out that is alright. Yes, that is $200 each quarter. Without lifting a finger or doing any more hard lifting, one gets $200 at the end of every quarter.
Now I get your attention. Yes or no?
So we are talking about $800 annual dividend before taxes. Imagine one more time without closing your eyes this time that you just hold on to those creme de la creme 1000 shares for five years. That will be $800 times five with a total of $4000 before taxes. I can see you smiling, but do not get carried away.
Obviously, things does not always work well all the times, but one that keeps learning will surely improve. The danger will be to start gambling and refusing to learn, practise and gain better skills and experience.
Warning
My intention is not to excite traders and investors, but present them with facts about trading versus investing.
Now, I have a question for you.
Have you got what it takes to become an intelligent investor?Do you know how to become a better investor? Is trading instead for you ?
The truth is that, many will make the same old mistake. That mistake is to set the wrong goal. That wrong goal is to have. Take is from me, one never has anything in life unless one is. In my opinion, the correct goal is to be. Yes, to be or not to be that is the ultimate question.
First set the goal to be a better investor, and work on it until you reach it.
To set a goal is about making an important decision in a lifetime.
Obviously, some will fail, but do no call yourself a failure too soon, because life may be calling you for better things. If one is destined for other things better than investing then investing is not for one. Am I speaking too much again?
At the same time, others are multi talented beings who can play every game at the highest level. I do not know about you, but I believe I am the temple of the true God, therefore I am bigger than any challenge.