Opinion about short term vs long term investment?

Time in the market > timing the market.

Everyone's situation is different, but holding the majority of your portfolio in long term and having a couple of shorter swing plays seems like the most popular strategy.

canada85000 wrote: ↑ I have no financial background and have been investing for a few years so far.

I have a neighbor (old gentlemen retired) who always recommend me to buy a safe stock (Bank stocks, Enbridge, Bell, etc) and leave it to grow long term.

For me, I feel I'm missing opportunities if I leave it untouched by letting the stock grow by itself. I feel like if I sell, the money is mine. if I don't sell, the money isn't mine yet. For example, I have a stock that will always reach a certain amount then it will go down, then back up again (several cycles). I feel like I could have earned a couple thousand dollars if I sell and rebuy several times.

Another example is: there is a split for some stock. My neighbor said don't sell, leave it grow, and company will give me extra shares. For me, I like to sell it before the split at the highest price to earn money. Then, rebuy same stock again after the split at low price. This is what I've been doing in recent years. Am I missing something? Is this the correct way of investing? Or I should listen to my neighbor and just leave the stock in my account and monitor long term? The only difference is he is retired and I am still working full time. I don't need money immediately but I would like to see my investments go up.

I'm old, and retired as well and I just do similar to what your neighbor recommends. Buy and hold.

Up to you. It's your portfolio.

The best way to aquire a small fortune is to start with a big one and trade a lot. I agree with the neighbor, buy and hold strategy is best in the long run.

canada85000 wrote: ↑ I have no financial background and have been investing for a few years so far.

I have a neighbor (old gentlemen retired) who always recommend me to buy a safe stock (Bank stocks, Enbridge, Bell, etc) and leave it to grow long term.

For me, I feel I'm missing opportunities if I leave it untouched by letting the stock grow by itself. I feel like if I sell, the money is mine. if I don't sell, the money isn't mine yet. For example, I have a stock that will always reach a certain amount then it will go down, then back up again (several cycles). I feel like I could have earned a couple thousand dollars if I sell and rebuy several times.

Another example is: there is a split for some stock. My neighbor said don't sell, leave it grow, and company will give me extra shares. For me, I like to sell it before the split at the highest price to earn money. Then, rebuy same stock again after the split at low price. This is what I've been doing in recent years. Am I missing something? Is this the correct way of investing? Or I should listen to my neighbor and just leave the stock in my account and monitor long term? The only difference is he is retired and I am still working full time. I don't need money immediately but I would like to see my investments go up.

Imagine you have a machine that produces money. It produces money slowly to start, but every year it gets about 4-10% better at producing money. You can own this machine, and you can buy more of these machines as time goes on. Do you 1) Let the machine produce money and just leave it alone? or 2) try and buy and sell the machines intermittently owning more and less?

Google "compounding calculator", enter your current portfolio value, plug in 8% and compound it for 30 years. See what the final number is. This is, of course, ignoring any future contributions.

In investing, typically the MORE you do the worse off you are. Also the more complex something is, the worse it tends to be for the investor. There are many people out there trying to get a cut of your money, and usually more complexity = more middle men = more frictional costs = less money for you.

I think overall, you'd be best served by reading some books on the subject to get yourself more education (we all have to start somewhere!).

For example, when a stock splits, and the "price goes down", it's actually the same from a total dollars (market capitalization) point of view. If you have one share that trades at $50, post split you'll have two shares that trade at $25 - you will literally get the extra shares added to your brokerage account. If you buy more at $25, you're getting 1/2 as much as when you bought at $50. When you sell pre split and buyback post split all you are really doing is generated commissions for your brokerage.

Also you have a few behavioural biases (FOMO, anchoring, hindsight bias) that you should work on, as at least being aware of these will make you a better investor.

A few books you may find interesting:

Stocks for the Long Run - Jeremy Siegel
The Psychology of Money - Morgan Housel
Millionaire Teacher - Andrew Hallam

If this all seems overwhelming, and you don't have the time (or interest) to really dig in, that's ok. Just dollar cost average an index fund (i.e. VGRO) and you'll do better than most individuals (and professionals) over a long time horizon.

https://ofdollarsanddata.com/even-god-c ... averaging/

canada85000 wrote: ↑ I have no financial background and have been investing for a few years so far.

I have a neighbor (old gentlemen retired) who always recommend me to buy a safe stock (Bank stocks, Enbridge, Bell, etc) and leave it to grow long term.

For me, I feel I'm missing opportunities if I leave it untouched by letting the stock grow by itself. I feel like if I sell, the money is mine. if I don't sell, the money isn't mine yet. For example, I have a stock that will always reach a certain amount then it will go down, then back up again (several cycles). I feel like I could have earned a couple thousand dollars if I sell and rebuy several times.

take the senior that wants safe investing, puts it in a HISA/GIC & wonders 'am I missing out on short term opportunities'

or the senior that follows BRK.B has held for just the last 10 years starting with $10,000 that has grown to $36,000 (3.6x the original investment) & says 'am I missing out on something'

many more examples

OP if you feel you can time the market in buyng & selling/timing the market (which not too many people can) - in other words - you want to gamble/play with higher risk opportunities, then take 10% of any gains out of your portfolio & play with it - see if you can get 12%/year without losing money

I think this is the difference between investing and trading. Either way is fine. I don't have financial knowledge, so just buy index and big cap and hold

OP you can turn short term trading into long term investment or maybe long term investing into some (pick em off) short term gain/profitable cash flow to use for whatever, maybe.

some ideas for you to think about, in no particular order ....

lets say that your solid 5%/yr performing portfolio let's say is a dividend growth 'position', then what about considering ...

a) DRIP the dividends

b) sell long out of the money covered call options to pick up an extra few points

c) at the end of each year draw out any gains + any dividends

d) park it & forget it.

e) use new capital from savings after you've max'd TFSA/RRSP, go do a speculative buy, once that new buy gains 5% or 10% sell the position

I agree with your neighbor. I understand the temptation to bank your gains, but honestly, do you really think you can buy that stock of yours at the bottom and sell at the top consistently for all of those cycles, without the benefit of hindsight?

As for stock splits, you must realize that there is no economic difference before or after the split. For example, CP recently split 5 for 1. Buying 20 shares now for $95 versus buying 20 shares at $475 two months ago does not mean you got a great bargain today. It's like a pie. One whole pie selling for $8 is the same as the one that is split eight pieces selling $1 each.

Like your neighbor said, find a quality blue chip stock and hold on. Don't let the fancy buttons on online trading platforms tempt you to trade. Keep it simple. Don't be greedy.