IN THIS LESSON

In-Depth Explanation

Long-Term Investing

What it is:
Buying quality stocks and holding them for years—even decades—to benefit from business growth, compounding, and market appreciation.

Common strategies:

  • Investing in strong companies (like Apple or Microsoft)

  • Using index funds (like S&P 500 ETFs)

  • Reinvesting dividends

Pros:

  • Lower fees and taxes

  • Easier to manage

  • Historically strong returns over time

Cons:

  • Requires patience

  • Gains take time

  • Can’t react quickly to market shifts

Best for:

  • Retirement saving (as teens you should worry less about this, but it is never too early to start)

  • Building wealth slowly and steadily

Short-Term Trading

What it is:
Buying and selling stocks quickly to capitalize on short-term price changes (daily, weekly, or monthly).

Common strategies:

  • Day trading

  • Swing trading

  • Using technical analysis (charts, patterns)

Pros:

  • Quick potential profits

  • Active control over your money

Cons:

  • Very risky, especially for beginners

  • Requires time, skill, and discipline

  • Higher taxes on gains

  • Transaction fees can add up

Best for:

  • Experienced traders

  • People with time and risk tolerance

  • Those who actively follow the market



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