Investing Vs Trading
We Have Surveyed 1500+ People on their opinion about Investing Vs Trading. Which one they prefer the most?
Specifically, we looked at how factors like Brokerage costs, minimum assets, risk appetite, technical analysis, fundamental analysis, mindset and experience affects the lives of traders and retail investors.
With the help of ZohoSurvey, we uncovered some very interesting findings on the People opinion about Investing Vs Trading.
And now it’s time to share what we discovered.
Here is a Summary of Our Key Findings:
We have reached out to more than 1500 People out of them around 100 have registered their opinion in this survey.
As you can see in the below box , the survey results are quite clear that 95.96% Survey Participants agree with first option. While 5.05% Survey Participants prefer the second option.
Investing Vs Trading:
As per survey results, Most Survey Participants prefer investing in Share Market than trading due to their opinion that long term investments in shares will yield more returns than short term investments or Intraday trading.
So, it is better to invest in shares on long term basis to yield more returns from your investments. Trading is great for those who have aggressive mindset and have high Risk appetite then average people.
Investing Vs Trading: Taxation
One more factor which makes Investing better is taxation. There are many tax benefits one can get if they invest in shares for long term.
But in Trading you need to pay both brokerage charges and taxes while buying and selling shares. Loss or profit doesn’t matter taxes are compulsory.
Whenever you buy and sell shares you need to pay GST of 18% on brokerage amount. This 18% GST is basically applied on the brokerage amount you paid to broker. So if you are interested in trading you should always choose discount brokers.
Who Are Discount Brokers?
Discount brokers are Stock brokers who generally have low brokerage charges then Full service broker. Due to automation, discount brokers brokerage charges are low. So, you need to pay less GST, if you opt for Discount brokers.
Full service brokers have more brokerage charges as they generally have more employees and Branches than discount brokers.
Let’s understand it with real life example:
Let say you open Demat account at Full service broker then you bought shares of Rs 1 lakh in delivery.
Brokerage criteria of full service brokers: 50 paisa on 100 Rs.
So, here you need to pay brokerage charge of Rs.500 and 18% GST on it which is 90 Rs.
In Discount broker you need to pay zero brokerage in delivery. As brokerage charges are zero in delivery than you don’t even need to pay GST in this scenario.
Let say you did Intraday transaction in Full service broker by selling 1 lakh Rupees shares on very same day. So, total intraday transaction is 2 lakh Rupees. So, in this scenario, brokerage charges are lower in discount broker as they put charges on order not value.
So, the point is if you are Investing in shares for long term than you will get more taxation benefits. While in trading, there are less taxation benefits and you also have to pay brokerage charges and GST on the brokerage amount. So, while trading it is better to opt for Discount brokers as they generally have low brokerage charges.
From the above graph, it is quite clear that most Survey Participants prefer Investing in Capital Market. In case you don’t know about capital market. Capital market is basically a segment of Stock Market just like Derivative market.
You can read more about Stock market and it’s segment here. We have covered all the important segments of Stock Market like Futures and Options, Derivative and Capital Market. It is in audio format for better user experience. You will surely learn a lot from it.
I’d like to again thank ZohoSurvey for their awesome software that made this research possible.
Over To You
Now I’d like to hear from you:
What do you think of this Survey’s result?
Investing Vs Trading. Which one you prefer the most? Do you agree with this or do you have some doubts?
I learned a lot about People’s opinion on Investing Vs Trading from this study, and I hope you did too.
If you have any questions or doubts regarding this survey please comment below. I will try my best to help you out.
Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. Please read the Risk Disclosure documents carefully before investing in Equity Shares, Derivatives, Mutual fund, and/or other instruments traded on the Stock Exchanges.
As investments are subject to market risks and price fluctuation risk, there is no assurance or guarantee that the investment objectives shall be achieved. Past performance of securities/instruments is not indicative of their future performance. This post is only for Educational purpose.