There is a question which is occasionally being inquired by those that are new to the financial markets, and even frequently discussed by experienced professionals in the investment world. That question is how one can distinguish between trading and investing. This regularly rises because trading and investing are performed in very comparable fashions.

In my opinion, I believe that what distinguishes trading and investing is scope of the definition. Both trading and investing are the application of capital in the quest of profits. Trade is realized to have an expected life span while investing on the other hand is more flexible as an investor may buy a company's share with no certain time of when it will be sold.

A different way one can define trading as being a little diverse from investing is to look at the way in which the capital used for the transaction is expected to yield a return. In trading, the rise of capital is the objective while in investing, they look more towards making an income over time. The investor anticipates to make some income over time which can be in form of interest and disbursements. Investors really expect their capital to rise over time but the trader is only concerned in the short time gain.

As you have seen, trading and investing appear as if they are the same thing. The processes of buying and selling are principally the same thing. When you are considering short term gains, you are going for trading but when going for the long haul and ready to wait for a long time to see wealth increase or gain, you are possibly going into investing.