Sheltered (Arbitrary)
Definition:
Arbitrage is a strategy of making profits from price differences that occur simultaneously in different markets or between instruments in financial markets. This process is generally considered low risk and guaranteed return because price differences are evaluated simultaneously and market imbalances are exploited.
Example from Daily Life:
Let's say a product is sold for 100 TL in Istanbul, but the same product is 120 TL in Ankara. In this case, you can make a profit of 20 TL by purchasing this product in Istanbul and selling it at a higher price in Ankara. This is an example of arbitrage by taking advantage of price differences.
Long-Term Investment Strategies
Definition:
Long-term investment strategies are investment methods where investors expect an asset (stock, bond, real estate, etc.) to gain value by holding it for a long time. These strategies are used to avoid being affected by market fluctuations and to obtain accumulated returns over time.
Example from Daily Life:
Let's say a friend of yours works in a company with high growth potential and thinks that the value of this company will increase in the future. In this case, your friend can buy shares of that company and hold on to those shares for years, expecting them to gain value as the company grows. This is an example of a long-term investment strategy.
Suggestions
Suggestions for Arbitrage:
1. Fast and Reliable Information: It is necessary to follow market information quickly and reliably in order to evaluate arbitrage opportunities.
2. Low Cost: It is important that transaction costs are low, otherwise arbitrage opportunities may not be profitable.
3. Market Knowledge and Experience: Market knowledge and experience are important in order to evaluate arbitrage opportunities correctly.
Recommendations for Long-Term Investment Strategies:
1. Research and Analysis: It is important to research the financial situation of companies, the future of the sector and macroeconomic trends before making long-term investments.
2. Diversification: Diversifying the investment portfolio helps reduce risks. Investing from different sectors and asset types increases the resilience of the portfolio.
3. Being Patient: It is important to be patient in long-term investments and not be affected by short-term market fluctuations. Investments are expected to gain value over time.
➡️ In conclusion, friends;
Arbitrage is used to generate profits from short-term opportunities, while long-term investment strategies are used to generate accumulated returns over time. Both strategies require careful planning and research, but offer different risk and return profiles.
