The instantaneous access to information that financial institutions have gives them an enormous advantage over the individual investor when it comes to short-term trading. Most people don't have the time necessary to be a trader, watching the market every second, able to react instantly to changes in the market. Analysts use their computers to chart a stock's price and volume over a period of time, in an effort to find patterns that indicate when to buy and when to sell a stock. Sometimes, though, it seems that interpretation of these charts is more of an art than a science, and sometimes the patterns are more easily discernible in hindsight rather than in real time. Diligence is also required to know when the signals are right to sell a holding.
Some investors rely on tips or they buy and sell merely on hunches.
This is usually one of the fastest ways to lose in the market. The average investor just doesn't have time to devote hours a day to following the market. Fortunately, they have an alternative. By spending just a few hours a month, investors can build a successful stock portfolio, one that will stand up over the long term and deliver excellent returns. The setbacks have been relatively minor and short-lived, compared to the tendency of the market to grow year after year.