Short-term trading or long-term investment, an informed choice
Conventionally, all trading on the stock exchange can be divided into two categories - trading and long-term investments .
The main advantage of short-term trading has always been high profits, and long-term investments have been valued for their low risk.
Therefore, those who wanted to earn a lot and quickly chose trading, and investors who did not want to risk a lot of money preferred long-term investments.
But every year the situation is changing more and more and we can already say that long-term investments are no longer low-risk.
Moreover, everyone from ordinary companies to government agencies engages in falsification.
How can fake reporting affect the profitability of investments?
Falsified reporting has the greatest impact when investing in the stock market.
For example, a company that is registered in an offshore zone and does not pay income tax shows high profitability at the end of the year. You buy its shares, counting on an increase in their price and a possible payment of dividends, but when the deception is revealed, the shares rapidly fall in price.
Also, to increase revenue, fictitious transactions may be concluded, or inflated prices for goods sold may be indicated. As a result, it seems that the company is developing and its turnover is growing.
If we talk about manipulations at the state level, now they have acquired simply frightening proportions.
To improve their performance, governments, through public services, inflate economic indicators. For example, increasing GDP growth by including bank loans or other specific services.
For example, Georgia's Gross Domestic Product is $32 billion, and if we add to it the amount of services such as bank loans in the amount of $320 million, the GDP figure will increase by 1%.
GDP growth shows the growth of the economy, although in fact people began to take out more loans, and no growth occurred.
They do the same with other important economic indicators in order to improve government performance.
Investors see that the country's economy is growing and begin to invest in its stock market or buy currency, but economic data is inflated and the stock market begins to fall.
Due to the reasons stated above, today only those who have insider information or can verify the accuracy of financial statements make successful investments in the stock market. And ordinary investors make mistakes more often and suffer losses.
Unfortunately, company shares are far from the only long-term investment that can fall in price.
Even real estate and gold periodically become cheaper, and there is no certainty that a price collapse will not happen again.
Why trading is better than investing
I myself am also a supporter of long-term investments, but I am increasingly convinced that their only advantage is saving time.
But if you really need to make money, then it is better to regularly trade on the stock exchange, buying or selling assets.
Moreover, it is not at all necessary to engage in scalping ; transactions lasting several days also bring quite good profits.
When trading, you always control the situation, and do not hope for the likely growth of investments made on the basis of dubious data.
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