There is a huge difference between trading and investing. As I'm into both trading and investments, some of my friends asked me this question. For experts this question can look silly but trust me there are people out there who don't know the difference between trading and investing. I would say there is nothing wrong in not knowing the difference because at one point of time we would have also been in that state not knowing the difference, so it is absolutely fine.
- Trading is usually associated with buying something for one price and selling it for another price.
- Investment is dropping our money one something that we know is a good business. - Usually trading is something where people buy and sell very frequently. In most of the cases in investments, people just buy something and don't even bother about selling it in the near future.
- Trading is most probably short term and investments are most preferably long term.
- People read a lot about the background of the business before they invest money on particular business. In trading it is quite opposite, they just study the graph and trade just like that for the case of fast income.
- Trading can be a risky business compared to investments.
- Trading is purely based on stocks and commodities but investments can be done on anything. It can be a business, building or even stocks.
I would always recommend people to avoid trading if they really don't know what they are doing or if they are least bothered about their money. Same with investment as well but I recommend people to do lots of investments. Especially diversified investments just to make sure all our eggs are not in the same basket. This avoids risks and provide better returns. Also when it comes to investments, as a legend once said "Invest only the money that you are ready to burn".