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Short-Term versus Long-Term Investment
You are free to choose how long you want to invest in the stock market. There
are many traders who invest only over the course of a single day. Hence they are
called day traders, but it is also normal to find people who invest in stocks for
more than five years. This all depends on your preference, as well as how you
want to approach the stock market. There is no hard and fast rule as for when to
classify an investment as a short term or for a long term. Some investments
begin as a short term but then turn into a long term in the process. For starters,
most people define a short term investment as any investment that lasts for a
year. Hence, all other investments that last for more than one year are considered
a long-term investment. Again, such definition is entirely up to you.
It is worth noting that the stock market, in general, does not fluctuate too rapidly.
Therefore, you cannot expect a big return on a short-term investment as much as
you can get from a profitable long-term investment. Many short-term
investments only last for a month or a few months.
The challenge with long-term investing is that it is more difficult to predict how
the market will respond over the course of your investment. Even though the

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market is doing terrible today, it can do well after a year. Of course, the opposite
can also happen. The purpose of the investment also matters. If you want to get
quick cash, then you can aim for a short-term investment. But, if you want to
invest for your retirement, then a long-term investment is the way to go.
It is to be noted that the market takes time to react. This is one of the problems
why day trading may not be a good choice since the market may take more than
24 hours before it responds to your prediction. Another differentiating factor is
the strategy that you adapt. For example, for a short-term investment, technical
analysis would be helpful to you; however, for a long-term investment,
fundamental analysis would be the better choice.