How do you define the difference between investing and trading?
Clearly, the IRS has some simple rules, and some not so friendly ones, for you to follow every year. But we each have our own ways of deciding the difference. And we each can be just as complicated and full of “exceptions” as the government.
Which is okay as long as you are not too surprised or annoyed when you turn a trade into an investment, or vice versa. Likely, the worst self-inflicted wound is when you let a great investment get away as just another trade. I confessed last week doing this with Apple (more than once).
So, let’s have it… Do you have strict rules for deciding which is which, and preventing one from turning into the other? Give us a few that guide you the most.
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