Short-term trading or long-term investing, an informed choice
Conventionally, all trading on the exchange can be divided into two categories: trading and long-term investments .
The main advantage of short-term trading has always been high profits, while long-term investments were valued for their low risk.
Therefore, those who wanted to earn a lot and quickly chose trading, while investors who did not want to risk large sums of money preferred long-term investments.
But every year the situation changes more and more, and it can already be said that long-term investments are no longer low-risk.
Moreover, everyone from ordinary companies to government agencies are involved in falsifications.
How can false reporting affect investment profitability?
The greatest impact of fraudulent reporting occurs in stock market investments.
For example, a company registered in an offshore jurisdiction and paying no corporate tax shows high profitability at the end of the year. You buy its shares, expecting a price increase and possible dividend payments, but when the fraud is uncovered, the shares plummet in price.
Fictitious transactions may also be entered into to increase revenue, or inflated prices may be quoted for goods sold. This creates the impression that the company is growing and its turnover is increasing.
If we talk about manipulation at the state level, it has now reached simply terrifying proportions.
To improve their performance, governments inflate economic indicators through public services. For example, by inflating GDP growth by including bank loans or other specific services in its calculations.
For example, Georgia's Gross Domestic Product is $32 billion, and if we add to it the amount of services such as bank loans worth $320 million, the GDP figure will increase by 1%.
GDP growth shows economic growth, although in reality people began to take out more loans, and no growth occurred.
The same is done with other important economic indicators in order to improve the government's performance.
Investors see that a country's economy is growing and begin to invest in its stock market or buy currency, but the economic data is inflated and the stock market begins to fall.
For the reasons outlined above, successful investments in the stock market today are made only by those with inside information or the ability to verify the accuracy of financial statements. Ordinary investors, however, are more likely to make mistakes and suffer losses.
Unfortunately, company stocks are far from the only long-term investment that can fall in price.
Even real estate and gold periodically fall in price, 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 want to make money, it's better to trade regularly 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 in quite good profits.
When trading, you are always in control of the situation, rather than hoping for a potential increase in investments made based on questionable data.
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