Investing is traditionally related to buying stocks or other financial instruments that are expected to fetch returns over a long period of time. They are often held onto like family silver for several years.
For this reason, it is important that investors select stocks or bonds of companies which are expected to grow in the long term. Thus, investing involves intense fundamental research about the potential investment target, be it a stock or a long-term bond.
The aim of an investor is to create a balanced portfolio of different stocks and bonds that give returns through increase in value as well as dividends or interest income. This enables him or her to attain financial security.
As a result, investors do not sell their holdings regularly. It is only in case of an emergency or when the stock has met its long-term targets.
Investing is different from trading. To know more, click here.