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☕️ Is it better to be a trader or an investor?

Jun 04, 2025

Howdy 👋

The markets have already begun to lurch from headline to headline as I suggested would be the case now that we’re through another earnings season.

For example, a “weaker” ADP jobs report has raised worries about the US economy… or so the press says. That, of course, has prompted US President Donald Trump to take issue Fed Chair Jerome Powell’s stance on rates. Via CNBC. (Read)

Meanwhile in Europe, auto parts suppliers are suspending output due to China’s rare earth curbs and the EU is apparently picking 13 critical new material projects. Via Reuters. (Read)

Farther East, South Korea has a new president, China’s first indigenous 9-valent HPV gets the nod and China’s global favorability climbs as US ratings decline. Via China Daily. (Read)

Japan’s fertility rate has hit a new low despite a government push while the country appears ready to say goodbye to tax-free shopping while politicians debate what is understood to be a widely abused system. Via The Japan Times. (Read)

You get the idea.

The distraction level goes up every time there’s a lull in earnings… along with the risk that you and I will do something stupid.

What to do?

Focus on the world’s best companies and watch their CEOs carefully.

They’re tasked with making money practically no matter what, so what they say and do matters a lot when it comes to your money.

Speaking of which, I am often asked, “can I be a trader and an investor” whenever there’s a slowdown in the action.

Many people believe you can be both, but I don’t think so.

My experience is that you can either be a trader with investing tendencies OR an investor who likes to trade around core positions, my preference.

How do you make the choice?

The first thing you need to do is have a clear, no-holds-barred conversation with the person looking back at you in the mirror every morning.

I mean it.

It’s okay to be one or the other, but be clear about your objectives, your skills, and your emotional discipline.

Mindset is key.

Traders tend to focus on speed, volatility, and precision. They’re looking for quick wins, nimble exits, and often thrive on minute-by-minute headlines like the ones we’re seeing now.

Investors, by contrast, think in terms of years—not ticks. They focus on fundamentals, long-term business models, and the staying power of world-class companies. Headlines are typically noise if they’ve got a long-term strategic plan and focus.

Both strategies can  be profitable.

Mixing ‘em usually isn’t.

In fact, I’ve seen scores of folks blow up their accounts over the years trying to be both.

The temptation is very, very real.

You see a story break on one of the news channels, or learn that a social media maven has locked onto a specific stock, read a tweet… and suddenly feel like “now’s the time” to flip a position you bought for the long haul. Or, time to dig in for the long term on a “trade” you bought with short-term expectations even though its already going against you.

So you sell… and watch it run sharply higher.

Worse, you hear about something “interesting” and think what the heck before tossing a few bucks on the table… only to see it drop like a rock.

This isn’t strategy but gambling with a few extra steps.

Long-term investors and skilled traders are very clear about who they are—and they know it before  they buy or sell anything.

It’s clarity that allows ‘em to stick to their plan, filter out the noise, and make decisions based on logic, not headlines or hype. Without it, emotions take over and expensive mistakes multiply.

They're also very clear about what  they want to accomplish before they put a single dollar to work. Whether it's capital preservation, income, growth, or all three, having well-defined goals helps guide every decision. It provides a framework to measure success, adjust strategy, and stay disciplined—especially when markets get choppy.

And finally, the world's most successful investors and traders have very clearly defined objectives that allow 'em to focus on being profitable, not merely being "right."

At the end of the day, it’s important to recognize that being in the markets is a journey—one that takes time to master and, like any craft, really get good at… a process that requires constant learning, refining, and evolution.

The more you treat it like a skill to be developed rather than a game to be won, the more likely you are to find long-term success. Or at least that’s my take after 45+ years in global markets.

Hope my perspective helps! 😀