Investor

Someone who buys an asset expecting to hold it long enough for the underlying business or asset to create value.

Example

Buying a broad index fund and holding it for twenty years.

Important

The word describes a time horizon and a mindset, not a net worth - someone putting $50 a month into a fund is an investor.

Related terms

  • Trader — Someone who buys and sells based on expected near-term price movement, not on the underlying asset changing in value.
  • Holding period — How long you keep an asset before selling it.
  • Time horizon — How long before you plan to spend the money you are investing.

Lessons that explain it

  • Investor versus trader — The words get used interchangeably, but they describe different time horizons, different skills, and very different odds. (10 min)
  • An angel invests their own money, and that changes everything about how they decide — Individual and angel investors put personal capital into companies. They move fast, write smaller cheques and answer to nobody - which is both their advantage and their risk. (9 min)

All 578 terms in the Investing glossary