Investor Classification
Investors are classified by the products they use and the procedure adopted by them.
- A stock trader is one who uses the product stock and the procedure trading.
- A long-term investor on the other hand uses the product stock and the procedure of buying and holding long.
- A short seller uses the same product stock and the procedure of selling and then buying back.
Similarly, a real estate speculator whose product is real estate adopts the procedure of speculation.
A collector of rare coins buys and holds long the product of rare coins.
A commodities future trader adopts the procedure of the futures market to trade in commodities.- A stock option trader adopts the procedure of hedging in the product of stocks.
- A day trader uses the product stocks and the procedure of speculation.
- A saver is one who wants to hold over a long term by putting his money in the bank.
Thus, there are different types of people doing different things with the same investment products. Under the banner of investing are people who are really gamblers, speculators, traders, hedgers, savers, dreamers and losers.
