As traders why should we have a long term perspective of Investment ?
Well, it entirely depends on your mindset. If you are a trader, then you don't need to bother about anything else. As I have posted earlier, I cover up some of my investment draw downs by trading. So, in short I am a medium term trader and long term investor. My time frame in defining what is Long term and what is short term is not fixed,it changes with volatility.
In what way a short term portfolio(1week to 1 month holding) different from a long term Investment portfolio ? How the returns are expected to exceed the returns of a Swing trading Portfolio ?
It is different in terms of alpha and beta both. In short term portfolio, your gains are less and your risk is relatively high. Depending on your skill set you can find suitable risk to reward trades. In long term, you have time on your side and if your investments are sound, then the gains can be spectacular.
For a short term portfolio's returns to be greater than long term portfolio, you need to have the right sort of environment. For eg, when the volatility is high, your short term returns can out run the long term portfolio returns. But, how many traders actually know how to position themselves in high volatility environment? That my friend is key to returns in the shorter term. And don't forget the risk that high volatility environment brings to a trader.
Note:- Lost hope in investment after burning my fingers in Sathyam, Teledata
What are the odds of this happening again to you. Satyam I agree was a shock for many. But how often does this happen? You can't draw inferences based on some trades. Furthermore, one year like 2008 will sway your faith away from trading. So many traders in that year swore never to trade again. Hence, its a double edged sword dear. Ultimately you need to know what works for you.
Tc