Traders, investors, and speculators – these 3 terms may sound similar to each other but are actually different and none can be substituted by the other. It is essential to understand the difference between these 3 types of users who invest their money in the stock market to determine which type best suits you. These users differ on the basis of objective, individual preferences, risks involved, and more. Read on to understand this differentiation as it will help you figure out which type best suits your risk profile.
Investors vs traders vs speculators
Below table will give you a better understanding of the differences between investors, traders, and speculators.
In a nutshell, these 3 types of users in the stock market differ from each other on the basis of approach, the risk involved, time period, and their behavior. Apart from this, another major point of difference is that an investor makes decisions based on fundamental analysis like past performance, company details, and more, whereas, a speculator takes his decision based on news, tips, small trend analysis, and individual opinion. On the other hand, a trader is more dependent on technical analysis using graphs, charts, and more along with risk management. The above differentiation will help you in determining whether you should trade, invest, or speculate to achieve your financial goals.
Disclaimer: This blog is exclusively for educational purposes and does not provide any advice/tips on Investment or recommend buying and selling any stock.