Stock Market Glossary
Long-term investor
Investors with an investment horizon of many years to decades.
In brief: Investors with an investment horizon of many years to decades.
Meaning in practice
Long-term investors benefit maximally from the compound interest effect, smooth out market fluctuations and can work with a higher equity quota. Discipline and patience are more important than perfect timing.
Context for investors and traders
For traders, this term is most useful when preparing and executing an order. Its meaning depends on the venue, liquidity, time frame and order type. A single reading is not a reliable buy or sell decision.
How to use this in practice
In practice, the term should be linked to a specific trading plan: entry, exit, position size and costs belong together. In short time frames, spread, slippage and delayed execution can quickly outweigh the theoretical benefit of an observation.
What to keep in mind
Write down which observation confirms or invalidates your assumption before trading. This keeps the term a decision-making tool rather than a retrospective justification for risk already taken.
