On Trading vs. Owning Stocks

Buy a business, don't rent stocks.

There are two ways to invest in stocks: Own quality businesses for the long-term or gamble in stocks in the short-term. The latter is more exciting—but exciting doesn't pay the bills in retirement.

Rather than buying stocks and hoping to make money every day, week, month, or year, you should buy stocks as if you were buying an entire business. After all, when you own stock, you own a piece of a business.

If you bought a business, would you panic if your phone started ringing off the hook as gamblers called offering to buy your business for less than you had paid? Would you fire-sale your business because the Oval Office was changing parties?

When you buy stocks, you should act as though you were buying the entire company. Rather than analyzing news like a stock gambler, you should look at your company as if you were sitting behind the manager's desk.

No rational business owner or manager would run for the hills at the first sign of a potential problem that may or may not materialize.

Be a business owner—not a gambler.