This one depends…
How is time treated in your curriculum with regard to the markets?
Are you in a hurry…
…or is your motto “hurry spoils the curry”?
One can make any market action an extremely difficult one if one squeezes time.
On the other hand, the same market action yields great results when time is stretched to infinity.
One can understand this in the predicament of the trader.
Expiry is due.
Trades are in loss.
It seems that trades are not going to make it to break-even by expiry.
They would probably be showing a profit after expiry.
However, time-span for validity of the trades has been squeezed to expiry.
Hence, the trader faces loss.
The investor, on the other hand, is invested in the stock of the same underlying, and doesn’t dabble in the derivative.
For the investor, time has been expanded to infinity.
The investor doesn’t feel pain from a time-window that’s about to close.
Now, let’s look at the cons for the investor, and the pros for the trader.
The price for making time one’s friend is the principal being locked-in for that much time.
The investor is comfortable with that.
If not, the investor feels pain from the lock-in, and may make a detrimental move that works against long-term investing philosophy, as in cutting a sound investment at its bottom-most point during a long drawn-out correction.
Investors need to fulfil the comfort condition before committing to infinity.
After a small loss, the trader moves on with the bulk of his or her funds.
Traders needs to take a loss in stride.
If not, future trades get affected.
The advantage of committing funds for short periods, in trades, is that one can utilize the same funds many times over.
The price for using short periods of time to one’s advantage, however, is tension.
One is glued to the market, and is not really able to use the same time productively, elsewhere.
Friendship with one aspect of time works adversely with regard to another aspect of time.
The investor is not glued to market movements. He or she can utilize his or time for multiple purposes while being invested simultaneously and then forgetting temporarily about the long-term investment.
It is easier to forget temporarily about an investment than it is to forget about a trade.
Over the years, I have found it difficult to combine trading and long-term investing, specifically in the same market.
However, I do take occasional trades, apart from being invested for the long term.
This works for me when the markets in question are different, as in Forex and Equity.