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good point, bear.
myself- i TRADE futures, but most of investments are stocks (and a smattering of commodities)
futures for me are for speculation. in my trading account. to generate income
stocks are ownership of good companies in order to build longterm wealth
i take profits from my trading account, and put them into longterm stuff - stocks, bonds, gold, etc.
i think many traders eschew futures because they don't understand them, don't want to understand them, and feel more comfortable with a known entity.
and also, as mentioned - one needs to differentiate between investors and traders. a relatively high %age of traders use futures.
a VERY small %age of investors do. |
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Correct. You explained it. In terms of your activity, you are INVESTING in stocks when you care about the standing of the company (fundamentals), and use it as a wealth building strategy. You actually care about the thing you are investing in. When you put this hat on you are an INVESTOR.
When you start plunging in the futures market...trading for quick large gains (or losses), it is SPECULATION and you've put on your SPECULATOR hat. I could care less about the soybeans I sold or the live cattle i'm liable for. It could even be intermediate term too.
I'm impressed that you can do both. I hope one day I could understand the stock market like that. I still don't know what a PE ratio is. I have enough on my mind currently, to try and not get blown up in the commodities market.
Oh - in my opinion, the investor role doesn't exist in the futures market.