Should I Try Day Trading?

Dear DTA, 

I’m looking to start day trading. Any advice? Thanks. 

-John A. 

Hi, John.

Thanks for taking the time to reach out to us. We value and appreciate every reader.

I’m going to give you my advice regarding day trading.

Before I do, however, I want you to know who I am and where this advice is coming from.

Now, I’m most certainly not a day trader.

I’m a long-term dividend growth investor.

What is dividend growth investing?

Fellow contributor Dave Van Knapp deftly explains, through his Dividend Growth Investing Lessons, what dividend growth investing is, why it’s so amazing, and how to successfully execute it.

Dividend growth investing is a strategy that essentially advocates buying shares in high-quality companies that reward their shareholders with their fair share of growing profit. This happens via growing dividends.

Buy these shares when they’re undervalued. Hold for the long haul. Reinvest growing dividends. Watch wealth and passive income pile up.

You can find more than 800 US-listed dividend growth stocks on the Dividend Champions, Contenders, and Challengers list.

These are some of the best companies in the world. 

A lengthy track record of growing dividends is a great initial litmus test of business quality and durability. Increasing dividends constitute the “proof in the profit pudding”.

Don’t let a company simply tell you how profitable they are. Make them show you.

Show me the money!

Any company that is able to pay out growing dividends for many years on end has to consistently do a lot of things right in order for that to happen.

You can’t run a terrible business while simultaneously sending out ever-larger cash payments to shareholders.

It doesn’t work that way.

Furthermore, growing cash dividends can make for an excellent source of totally passive income.

Better yet, many companies out there are increasing their dividends faster than inflation, meaning your purchasing power is steadily rising.

In some cases, it could be possible to even retire and live off of passive dividend income.

That’s exactly what I did.

As I describe in my Early Retirement Blueprint, I used this investment strategy to go from below broke at 27 years old to financially independent and retired at 33 years old.

In only six years, I built the bulk of my real-money FIRE Fund.

The Fund now generates the five-figure passive dividend income I live off of.

Jason Fieber's Dividend Growth PortfolioThat income is completely passive. And it’s growing all by itself.

This strategy is never short on opportunities, even in this elevated market.

Make sure to follow my Undervalued Dividend Growth Stock of the Week series.

I provide weekly high-quality investment ideas in that series.

Every stock I feature is a dividend growth stock that has to pass many hurdles as they relate to quality and valuation.

Undervalued Dividend Growth Stock of the Week by Jason FieberNow that you understand where I’m coming from, John, I’ll provide my advice regarding day trading.

My advice would be…

Don’t day trade. 

I’ll tell you why I say that.

Day trading is pure speculation. 

Maybe you come out ahead.

But maybe you don’t.

In my view, it’s akin to gambling.

You’re betting on short-term directional moves.

And it’s incredibly difficult to repeatedly make correct short-term calls like that.

There’s simply no need to speculate when investing can make you extremely wealthy over time.

For example, I can’t think of a single day-trading billionaire.

But I can think of numerous investor billionaires, including Warren Buffett.

Warren Buffett, by the way, owns many high-quality dividend growth stocks.

I don’t think that’s a coincidence.

Look, dividend growth investing isn’t the end-all, be-all to investing strategies.

Personally, I believe it’s one of the most phenomenal and straightforward strategies out there.

However, there are many different strategies to choose from.

Find one that best suits you.

Then live below your means, save your money, and intelligently invest your capital for the long term.

No matter what you ultimately decide to do, John, I’ll leave you with my best advice of all.

Start today. 

I wish you luck and success.

Jason Fieber

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Disclaimer: Jason Fieber is not a licensed financial advisor, tax professional, or stock broker. Please consult with a licensed investment professional before investing any of your money. If your money is not FDIC insured, it may decline in value. To protect the privacy of our readers, any names published in this article are under aliases. In addition, text may be edited, omitted or paraphrased for grammar or length.