Many people say they’re investing for the long term. But in reality, they check their portfolio daily, panic-sell during dips, and chase last year’s winners.
We might call it ‘portfolio rebalancing’ but in reality, many of us are ‘trading’ and calling it ‘investing’.
I know this because I’ve done it myself.
What type of investor are you?
There are three different investor types, and most people mix them up without realising it:
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Trading: short-term, timing the market, high risk. You’re betting on price movements over weeks or months. Transaction costs matter. Emotions matter more.
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Investing: long-term, compounding, moderate risk. You’re buying pieces of businesses and letting them grow over 10+ years. Time in the market beats timing the market.
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Wealth preservation: capital protection, low risk. You’re trying to keep what you have, not grow it aggressively. Cash, bonds, and safe assets dominate.
The problem? Well, as I said earlier, lots of people say they’re investing but are actually trading.
Learn from my mistakes
In October last year, I sold my AMD (NASDAQ: AMD) shares, locking in a decent profit. I felt pretty good about myself for the following six months as the price slowly declined.
But in early March this year, the stock started rallying. It’s now up over 100% since I sold. That’s a harsh lesson.
I panicked about heavy tech concentration and AI fears leading to a crash. That’s trading behaviour.
In reality, AMD is doing fine. Revenue in Q1 2026 dropped slightly from the previous quarter, but overall is up 34.97% year-on-year (yoy). Earnings are doing even better, up 123.35% yoy.
Its balance sheet is solid as a rock, with $64.46bn in equity against a meagre $3.87bn in debt. And free cash flow of $8.57bn is even ahead of big names like Tesla, McDonald’s and GE Aerospace.
But rapid growth brings risk. With a price-to-earnings (P/E) ratio of 164, the company can’t risk even a mild disappointment.
Even though earnings are expected to grow, some analyst estimates put the stock at 12% overvalued. So I might have already missed out on the best gains.
But that doesn’t change the long-term story. The share price might slow this year, but for growth-focused investors with a 10–20 year outlook, it’s still worth considering.
Why time, not timing, matters
In 2025, UK funds suffered £11.1bn in outflows from retail investors even though the FTSE 100 surged 21.5%. They panic-sold and missed the rebound.
In reality, trying to sell high and buy low is pointless. Research from Capital Group revealed that investing on the worst market day for 20 years vs investing on the best day resulted in almost no difference:
