There was a research conducted in United States on the average number of days investors hold the stock. The number was 187 (about 6 months) in 1991-1996 period. The median was worse with just 90 days. With internet boom era and overpriced IPOs in 2000s, this came down to about 3 months. There is no data available for Indian market but looking at the volatility of our stock market, the numbers will be very close or even less.
This tells us there are mostly short term traders in the market. Is there anything wrong with short term trading? Absolutely not, but investors should know the rules of the game before they trade short term. Apart from knowing the rules, investors should also understand that short term trading mostly relies on luck and on study, which at best can be termed speculative.
In the current volatile market scenario, you could be tempted to try your luck in some short term investment strategies to make the best out of a bad situation. Here is an understanding of some shortRead More »from Stock Investing – Short Term Strategies