I think both strategies have merits depending on the stock. I have large dividend bearing holdings that I never trade, and only sell down a little every time they rise to a certain total value, and investments in other things (not shares) that I meant to sell years ago but never got around to it and keep going up in value, so I keep promising I will sell them, but the profit on all these is ridiculous now and the tax will be obscene if they are dumped in a hurry, then I have a large chunk of cash in swing trading stocks which I buy and sell every day.
I have a network of companies and trusts that hold most of this stuff - including all the trading stock, so the tax is the same no matter how I approach it, but then I also have to fund an accounting team to manage tax and reporting obligations that arise therefrom.
From that perspective I think swing trading is the way to go on volatile stocks that don't pay dividends. For dividend stocks I suspect without checking that the swing trading is perhaps less advantageous - but then they behave more like bank deposits. For non-dividend stocks volatility tends to be higher as all the future and past income stream is built into the current share price, so trading them I think is wise as the owners of these tend to be highly emotional because all their past and expected future gains are built into the current price, and when it falls their postponed recognition of returns and life plans all fall with it and they panic.
Trading without a technical understanding of the market and share price movement patterns is a recipe for losing a lot of money, so for the right person trading is a good idea, for others without the time to learn, time to monitor the market, mentors to follow or interest; holding long term is probably safer. Oh, also the right tax structure. Companies are good for this, but they cost money to run and thus you need to commit to a significant turnover to pay for their administration.
AKE Price at posting:
$13.91 Sentiment: Buy Disclosure: Held
