Which Investing Strategy Is Suitable for You? Find Out With These 5 Simple Questions

As the saying goes, there is more than one way to skin a cat. In that same vein, there are different ways to potentially profit from the markets. The strategy you choose should depend on your unique investing personality, which encompasses your financial goals and risk tolerance.

Whether you’re looking for steady, long-term growth or seeking to capitalise on short-term market movements, there are various strategies you can adopt. Here, we’ll take a closer look at two main types of investors: The long-term type, known as the “Buy and Hold” investor vs the short-term day trader.

Important information: Always do your due diligence before investing. Remember that markets can be volatile, and returns are not guaranteed. Ensure you understand the risks involved before trading or investing in any financial instruments.

In general, there are 2 types of investors 

The typical long-term investor is one who carefully selects assets with strong fundamentals and holds them for an extended period, often measured in years. 

• The goal: To ride out short-term market fluctuations for substantial long-term gains. 
• The requirement: A tolerance for market volatility and the discipline to resist the temptations of frequent trading.

On the other hand, day traders thrive in the fast-paced world of short-term market dynamics. 

• The goal: To profit from intraday price fluctuations by entering and exiting markets within a single trading day, using quick decision-making, technical analysis, chart patterns, and market indicators to identify opportunities.
• The requirement: An appetite for risk, a high level of engagement, and the ability to adapt swiftly to changes.

How do I get started on my investing journey?

For those new to investing, a way to enter the market is via a brokerage, which facilitates the buying and selling of financial securities (stocks, bonds, mutual funds, ETFs, commodities, etc.) on your behalf.

The first step in your investing journey is choosing the right brokerage. You will need to look at what the brokerage offers. For example, how much do you need to pay for commission or other fees? These fees, though small, will eventually eat into your profits. A user-friendly interface also matters, especially for greenhorns. Other factors include the reliability of the brokerage, what tools it offers, what markets it serves, and so on.

One brokerage we recommend is the CMC Markets Group. Since pioneering online trading over 30 years ago, CMC has continued to innovate and respond to market changes and challenges. Today the Group boasts a broad financial services offering such as stockbroking (CMC Invest) and leverage trading (CMC Markets).

For day traders

With CMC Markets, you can trade CFDs or contract for differences from over 12,000 markets, including forex, indices, commodities and shares.

CMC Markets offers two user-friendly platforms: 

1. Next Generation (NGEN): an award-winning trading platform featuring institutional-grade features, lightning-fast execution and best-in-class insight and analysis;
2. MetaTrader 4 (MT4): for those who prefer a more traditional approach or trade with custom indicators (these are programmes independently developed in MetaQuotes Language 4 by other traders and function as technical indicators).

Check out our in-depth review, where one of our writers tested CMC Markets out and even won a trade using the NGEN platform.

Commissions are also easy on the wallet, from US$10 for US Stocks and from S$10 for SGD Stocks (for reference, some platforms out there have a minimum commission of S$50). 

For forex traders, explore CMC Market’s FX Active account and trade ultra-tight spreads from 0.0 pips on six major forex pairs. This means that you can take profits from the tiniest of movements. You can save with a 25% spread discount (when compared to CMC’s standard pricing) on all other FX pairs and enjoy a fixed commission rate of 0.0025% per transaction, charged upfront on opening and closing trades.

For long-term investors

If you’re a long-term investor, the CMC Invest platform may be for you. Built upon transparency with a heritage that spans more than 30 years, the expansion of CMC Invest to Singapore forms part of a three-year strategic plan to expand the Group’s successful Invest platform, which endeavours to make trading accessible to all. 

With CMC Invest, you can access thousands of shares, REITs, and ETFs across 15 markets, for great diversity and to enjoy global opportunities when they arise. Enjoy extended trading hours, too: CMC Invest allows you to place orders to trade in pre- and after-hours in the US market, so you have more time to capitalise on opportunities.

What we love most about CMC Invest are the zero platform, custody, maintenance, or inactivity fees, as well as straightforward and transparent price plans. Did you know you have 22 free monthly trades in SG, US, UK, CA, and HK markets on CMC Invest as well? One secret is that this proprietary, secure platform was built by CMC itself, which means the brokerage can remove layers of third-party charges and pass on these savings directly to investors.

Eliminating hidden fees allows you to maximise your gains, as even small fees can accumulate significantly over extended periods. See our analysis of how trading expenses will eat you alive.

Exclusive Promotion: As part of their launch exclusive welcome offer, get up to 1 free Tesla share when you fund and trade today. Or get up to S$300 cash rebate when you transfer your positions to CMC Invest. Sign up here.

CMC Markets vs CMC Invest: A quick comparison

Here’s a quick table to compare CMC Markets and CMC Invest and their various benefits.

Brands	Trading platform	Markets	Charting	Fees	Best for
CMC Markets	Next-Gen & MT4	Over 12,000 markets including across forex, indices, and more	Award-winning charting tools	Tight spreads and low commissions	Day Traders
CMC Invest	CMC Invest platform	Thousands of shares and ETFs across 15 markets, including US, HK, UK, and SG	TradingView charting package	Zero platform, inactivity, settlement, or custody fees	Long-Term Investors

Enjoy the best of both worlds (and more) with CMC

Choosing the right strategy based on your investing personality is crucial for long-term success. While day trading and long-term investing offer distinct advantages, it’s essential to recognise the benefits of both approaches. Building a diversified investment portfolio that aligns with your goals is key, alongside a platform with the right features and tools that can help you reach your trading goals more efficiently.

But don’t worry, as one’s personality is never 100% binary, many traders dabble in both CMC Markets and CMC Invest. Even though you may be a day trader, you shouldn’t neglect long-term investing (and vice versa), as there are benefits just as there are risks. For example, you can hold onto some long-term positions while using a small percentage of your funds in the high-speed, highly volatile and riskier day-trading space.

With CMC Markets and CMC Invest, you can create any investment portfolio that is most suitable for you.

Open a CMC Invest, CMC Markets Next Gen, or CMC Markets MT4 account today to get started.

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This post was written in collaboration with CMC Markets. While we are financially compensated by them, we nonetheless strive to maintain our editorial integrity and review products with the same objective lens. We are committed to providing the best information in order for you to make personal financial decisions with confidence.

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CMC Markets Singapore Pte. Ltd (“CMC Markets”) and CMC Markets Singapore Invest Pte. Ltd. (“CMC Invest”) are member companies of the CMC Markets group and are regulated by the Monetary Authority of Singapore, CMC Markets (CMSL No: 100063) is licensed to deal in over-the-counter derivatives contracts and leveraged foreign exchange), while CMC Invest (CMSL No: 101320) is licensed to provide custodial services, and deal in securities, units in a collective investment scheme, and exchange-traded derivatives contracts. Both CMC Markets and CMC Invest are execution-only service providers, and are exempt financial advisers. This document is not an offer or a solicitation to deal in any financial instruments. CMC Markets and CMC Invest do not provide financial advice. Please also refer to  the Terms and Conditions, Terms of Business, Risk Disclosures, Privacy Statement, and other important information on the respective CMC Markets and CMC Invest websites. MoneySmart is our paid affiliate marketing partner.

The content contained herein is provided for general information purposes only. Accordingly, please note that no reliance should be placed on the content contained herein for your own trading and investment decisions. While every care has been taken in preparing the content herein, no representation, warranty or other assurance of any kind is made with respect to the accuracy, completeness or suitability of it for any purpose, including any data, analyses, reports or information obtained from third party sources. CMC Markets and CMC Invest shall not be liable for any claim, loss, damage or expense, however arising, suffered by you or anyone in connection with the use of the content herein or matters to which the content herein relates to. 

All forms of trading and investments carry risks and may not suit everyone. Trading Contracts for Difference (“CFDs”) may not be suitable for you. Losses can exceed initial investment so do ensure you have regard to your specific investment objectives, financial situation, risk tolerance and particular needs, and understand the risks involved prior to dealing in financial instruments. Where in doubt, you should seek independent expert and professional financial advice. This advertisement has not been reviewed by the Monetary Authority of Singapore.