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It makes no sense to say that active trading is zero sum but passive trading isn't. Either both are or none are. Holding an asset for N days does not magicall
by glofish 6y ago
It makes no sense to say that active trading is zero sum but passive trading isn't.
Either both are or none are.
Holding an asset for N days does not magically flip it from category to the other.
- AnimalMuppet 6y agoYes, but a bit of no. Yes, if the market is overall rising, then active trading should enjoy that overall rise just like buy and hold does. But then why active trade? Because you think you can do better than passive. That part - the "doing better" part - is zero sum. In fact it's negative sum, because of transaction costs.
- cortesoft 6y agoThis assumes that all money stays in the market. Some people selling shares to active traders are pulling money out of the market to use for other purposes. Are they ‘losing’ money because they don’t get the profits from a later rise in price? Maybe, but it isnt so cut and dry.