What’s the difference between stock trading, investing and real estate?
The dictionary meaning of the word ‘Investing’ is putting money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit. Further drilling down reveals a few other aspects like period of holding, safety of principal, regularity, and so on.
|Picture depicts investor walking to the stock broker to purchase shares|
‘Stock Trading’ is buying shares or sticks with an intention of profiting from the price fluctuations on the stock market. Stock trading is a speculative activity and does not fit into the definition of investing.
|Picture shows a trader sitting before the computer trading in stocks|
Real estate investment qualifies as investment though it has some fundamental drawbacks.
Following table brings out the differences among the three: