With what's been happening in the world the past 4 weeks, a lot of people are coming out of the wood work and smelling opportunity. As people who spend a great deal of time trading, Mike and I have an influx of texts, phone calls and e-mails from friends, family and clients about putting some long term capital to work.
The common theme I see among most casual investors is the
confusion between trading and investing
. The rules for each are much different and many trading rules do not apply to investing
. Likewise, many investing rules do not apply to trading. Swapping these rules sets will get you the financial equivalent of prison raped while you have to hold the boom box blasting Air Supply.
Let's look at the difference between the two and start with a great example of investing, Warren Buffet.