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We advocate those who desire to maximize long-term success to approach the markets not with an “all-or-nothing” mindset as it concerns Trading or Investing, but encourage employing both as two forks of a comprehensive and profitable strategy. As such it’s important to segregate one’s investment and trading capital into two different “baskets” as it were. The reasons for this are practical and psychological.
One’s trading portfolio should be allocated in a very different fashion than one’s investment capital. Whereas the former may experience dramatic changes in holding and capital distribution, one’s investment portfolio should remain relatively stable over the course of months and years. Therefore, segregating these two accounts increases the likelihood that one will successfully execute the ‘buy and hold’ approach with their investments on the one hand, and on the other will not be tempted to employ a “passive” approach with their trading capital where the hard and fast rule is to ‘cut losers quickly’. Students learn all this and more as members of our community and participants in our educational program.
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