Day Trading or Long Term Investing?


As Financial Advisors we deal with a broad range of clients on an ongoing periodic basis who have various objectives and goals. Since the COVID-19 outbreak we have seen a meteoric rise in younger clients asking us for advice on whether they should go about Day Trading or Long Term Investing. Clients whose age demographic aren’t usually in tune with the financial world are becoming more and more interested in beginning their investment journey.


This is brilliant, as we all know, investing early and putting money away at a young age is the single greatest step you can take on your journey to a financially successful future. Taking advantage of compounding interest effects, long term investment horizons and reduced spending habits have caused a tidal wave of change.


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Rise of the Day Traders


Online trading apps and platforms which we have all come to know, have helped increase the appetite for expediency among the younger generations. Slick interfaces, low charging structures and quick account setup times have opened the markets up to many. On the face of it, this is great, undoubtedly so.



The introduction of a new generation of investors into the marketplace now can reap all the rewards investing has to offer. Only the fact remains that many investors entering the investment landscape have done so with little to no previous experience. One key change is happening, many investors are interpreting “long-term investing” as “day-trading”. Day-trading should not be confused with long-term investing.


Day trading, as the name suggests, involves frequent buying and selling of stocks or investments on the same day. When the market opens, so begins the buying and selling. When the price of a stock changes to a point that is deemed favorable, the trader can make a profit, sometimes small, sometimes substantial depending on the stock and market price.



  1. Quick to set up an account, and low charging structures (depending on the platform).
  2. Little capital (money) required to maintain a daily account balance to trade.
  3. Significant gains can be made with the right trades over a short period of time.
  4. Disciplined and dedicated investors can be highly successful with the right financial analysis tools and a good understanding of how the markets work.



  1. More capital (money) required for those who wish to trade more frequently throughout the day.
  2. Hefty fees or commission may be deducted from profit made from each trade, sometimes costing you more.
  3. Trading most often requires a lot of time and attention, at least two hours each day. For the serious traders, around five hours each day.
  4. Running the risk of over-trading and doubling down on potential losing trades.


Long Term Investing


Long-term investing is known as the more prudent approach for investors. This method involves the buying and selling of investments over a period of years, usually longer than three to five years. Here, the investor will approach an investment company and sit down with a Financial Advisor to have a conversation about his or her plans for the future and what goals they aim to achieve in the long term. Why is this regarded the more prudent approach?

Long-term Investing


Its about planning for the bigger picture. A Long-term investor will often use this route with the intention to realize sustainable returns over a period of time and will rely on professional fund managers to actively monitor and manage the stocks on your behalf (at a reasonable charge).


The Advisor will take into consideration the investor’s personal and financial circumstances, assess and calculate the investment time horizon (term) and the level of investment risk he/she is prepared to take and that is required, and based on these factors, put together suitable investment solutions to achieve the investor’s goals or objectives. 


  1. Option to invest a small amount regularly (monthly), or a larger one off investment.
  2. Asset class diversification to effectively manage investment risk (Equities, Bonds, Property, etc).
  3. Commission and charges are disclosed upfront and transparent to the investor. Financial Advisor fees can be negotiated.
  4. Suitable for investors who wish to invest long term and to achieve future financial goals.
  5. The outcome of staying disciplined and invested in the market over time (riding the waves of short-term volatility) has historically delivered positive and consistent “compounding” returns, with the investor always coming out on top.


  1. Financial Advisor fees, fund management charge, fund switches and trading costs apply (usually offset by fund performance over time).
  2. Not suitable for impatient investors who are looking for immediate returns.
  3. Historically, markets have been impacted by periods of downturns (capital at risk). Investors can make the mistake of selling out of the market, locking in investment losses.


What route should I take?


The key difference between day-trading and long-term investing is that one requires skill and attention, and the other simply requires patience. It really depends on your personal investment objectives, the amount of capital you have, your attitude to risk, and how much time you wish to dedicate to it. Many investors choose one or the other, some choose to incorporate both methods as an investment strategy. Its important to consider that you should never risk what you cant afford to lose. This is why it is recommended to assess your attitude to risk, and match the appropriate investments to your personal risk profile.


We therefore urge anyone who plans to focus their sole investment and retirement strategy on an online trading platform to do the proper research and due diligence that such an undertaking demands from you. If done right, this can provide great results. 

Contact us for Financial Advice


Whether you plan to incorporate trading in a personal capacity with other investment strategies or plan to go it alone it is always worthwhile receiving impartial financial advice first.


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Where to find us



If you are looking for a Financial Advisor near you, you can locate us at the famous Walkinstown Roundabout in Dublin 12.

Address: Greenhills Centre, Units 1 & 2, Greenhills Rd, Walkinstown, Dublin 12, D12 YH22.



If you are based outside of Dublin, we have Financial Advisors located in Co. Wicklow and Co. Cork (Munster), who would be happy to commute to you.


Click on the map below for directions to our offices…


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Need to speak to a Financial Advisor?

Fill out your details and enquiry below, and one of our Qualified Financial Advisors will get back to you shortly.

Time in the market VS Timing the Market

As Warren Buffett once famously said, “The only value of stock forecasters is to make fortune tellers look good.”


Most stocks can result in a massive profit, but what has led many of investors to try and time the market is the opportunity of taking a gamble and “Hitting it big”!


Understanding volatility is paramount! Before one looks at how or why individuals try and time the market. It is important to first consider stock market volatility. Volatility can be defined as the degree of variation of a trading price over time, or the erratic up-and-down movement of a stock based on many factors such as economic releases, company news, or unexpected earnings results


SMART investors know that it is impossible to predict a stock’s outcome. However, it is only human nature to make the wrong decisions when it comes to your investments, especially during times of crisis.


It is also natural to be concerned when you see markets fall sharply and the value of your investments decreases. As per the previous Global Financial Crisis, once again the COVID-19 pandemic has shown how fast things can change in financial markets.


While steep falls in the market can be concerning, it’s important to bear in mind that investment or price volatility is usually associated with investment risk; and short-term volatility is the price you must pay for the chance of higher LONG-TERM returns. This is why we call it “long-term investing”.


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What is Timing the Market, and does it work?


As you may have guessed already, Timing the market is where a person tries to predict the future. Although it sounds ideal to buy stock and sell it shortly after it has made a huge profit, it is often times more complicated and costly than that


There are people who manage to get lucky, but it is only luck. One may consider the idea of winning consistently but where one may have luck with one stock trade, he/she may lose it all on the next.


The cost of Market Timing


One of the biggest costs of market timing is being out of the market when it unexpectedly surges upward, potentially missing some of the best-performing days, or points in the cycle.

This can occur when people try to adopt the ‘buy low, sell high’ approach where they try to consistently determine when a stock has hit its lowest or highest point.


A classic example:

An investor may assume the market will drop, switches out or sells off the equity allocation in his/her portfolio and places the money in more conservative investments, such as cash. While the money is out of stocks (equity), over the next year the stock market enjoys a high-performing period. The investor has, therefore, incorrectly timed the market and missed those top days or months.



The importance of ‘Time in the Market’


Instead of trying to time the market, we believe that spending time in the market vs timing the market is more likely to deliver good returns over the long term, whilst removing the anxiety of losing part or all of your life’s savings.


Of course this would mean taking the rainy days along with the sunny, but if history has proven anything, it is that markets and economies tend to have an upward trajectory over time. For instance, the MSCI World index has delivered average annual returns of +10.9% since it was launched in 1969.


At Smart Financial, we base our investment decisions on the long-term fundamentals rather than short-term market noise.


For some, it’s difficult to invest that much time in the market, but one should remember how it aligns with their financial goals. The investment may be needed for retirement purposes, marriage, purchasing a new home, or even saving for their child’s education. So, there are important factors that come into play.


By waiting for steady and achievable growth over time, SMART investors are able to achieve their long-term financial goals, as outlined in their financial plan.


The power of Compounding returns


As Harry Markowitz once justifiably noted that diversification “the only free lunch in finance,” this meant that investors get to have the benefit of reduced risk while diversifying into various asset classes.


Not only do investors get to enjoy this benefit over the long-term, but they also benefit from the potential to achieve great returns from the power of compounding. This essentially means that get to enjoy generating more returns over time via the “snowball” effect (Interest on interest).


For example, when a person invests in equities for 10 years, the positive effects of compounding coupled with investment growth reaps significant rewards.



An Investment journey of Three friends


The need to make changes to our investments may provide temporary emotional relief and a feeling that we are slightly more in control of the situation, but at a cost. In the longer term, the wrong decisions taken during market volatility and times of uncertainty can have a devastating effect on your investments as well as into retirement.


The last time the markets experienced a similar shock like the one earlier in 2020 was the global financial crisis of 2008/2009. Many investors would have taken the knee-jerk decision to switch to ‘safer’ investments or sell out of the market, irrespective of their investment goals.


To try and time the market as an investor, as John and Michelle did, is a guaranteed way to lock in any losses and, consequently, also to miss out on any potential recovery in markets. So what should investors do? Like Claire, doing nothing is often the best strategy.


Let’s see how the different Investment Strategies fared…


Let’s take three friends, all aged 30 years, as an example of what to do, and what not to do when it comes to investing. Claire, John, and Michelle, after receiving financial advice, all decided to invest 10,000 each into an aggressive fund on 1 January 2020. By 23 March, after a rocky time in the markets – the stock market had already crashed by more than 30% because of uncertainty around the pandemic and the worldwide lockdowns – John decided ‘enough is enough’, he wants his money to feel safer and switched out of the fund into a conservative fund.


Michelle, worried about the markets and panicking, decided to withdraw all of her money from the fund and keep it in the bank. Claire, however, listened to her financial advisor and decides to stay focused on her long-term goals. She keeps her money in the fund, knowing that her that her investment strategy should always align with her goals.


In April the market begins to recover, as markets usually do. At the end of June, Claire is better off than John and Michelle. Claire’s investment is now worth 9,100. This is still less than the initial investment, but she knows her money is in the most suitable fund for her personal circumstances, and that over time her money will grow and she will achieve her financial goals.


John, who switched to the conservative fund, is worse off than Claire and his money is now only worth 8,300. On top of that John’s investment – if he doesn’t switch back to the aggressive fund – will likely not grow as much as Claire’s, and over the long term, he will be worse off.


Michelle, who panicked and withdrew all her money into the bank only has 7,500 at the end of June. Michelle will have to reinvest back into the original fund if she wants her money to grow over the long term, but she will buy back at a time when the markets have recovered and she has less money to invest, which will most likely leave her in a worse position over the long term compared to his two friends Claire and John.


time in the market


The lesson is, be like Claire , and not like John or Michelle…


Investing has more to do with waiting than doing – let your Financial Advisor guide you through your journey.


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There’s never been a better time for Financial Advice


Here at Smart Financial, we can’t stress enough the importance of investors focusing to their goals, as well as the time frame for their financial plan, before starting the investment process.

For any one who is looking to weigh up the pros and cons of time in the market vs timing the market, its important to remember that, although market volatility can produce the feeling of financial uncertainty, TIME IN THE MARKET will offer a better outcome for your future!


How our Smart Financial Advisors can benefit you through the ups and downs:

  1. Discuss why it’s important to prevent unnecessary risks and costly mistakes by avoiding emotional decisions.
  2. Help you prepare a financial plan to address immediate challenges and to put a strategy in place for you to achieve your long-term financial goals.
  3. Our Advisors have a wealth of training, knowledge, and experience in the financial industry, who can assist you to make SMART DECISIONS about your money, to budget and save accordingly.
  4. A Financial Advisor will undertake research on a regular basis in order to ensure they are up to date on current events in the industry, and of the markets, so you don’t have to.
  5. Giving you assurance that your financial future is well looked after, and that we are one phone call away…



Where to find us



If you are looking for a Financial Advisor near you, you can locate us at the famous Walkinstown Roundabout in Dublin 12.

Address: Greenhills Centre, Units 1 & 2, Greenhills Rd, Walkinstown, Dublin 12, D12 YH22.



If you are based outside of Dublin, we have Financial Advisors located in Co. Wicklow and Co. Cork (Munster), who would be happy to commute to you.


Click on the map below for directions to our offices…


Financial Advisor near me



Need to speak to a Financial Advisor?

Fill out your details and enquiry below, and one of our Qualified Financial Advisors will get back to you shortly.