You can view stock markets as sport or you can view them as work. You can “trade” anything with a pulse and a price. If someone else will give you money for it, it has a price. For something to be an investment, what is under the price matters.
The truism about “time in the market, not timing the market” connects to the fact that fundamental investing is work, not sport. If you sit in cash for long periods of time to “avoid market risk”, then your money does no work.
Cash is an important part of financial planning to
create buffers for the unexpected. Emergency Funds of 3-6 months of your
spending needs mean you don’t have to harass your investments when the
unexpected pops up. Beyond that, the money is more couch potato than
a Springbok World Cup-winning bomb squad.
To “time the market” you need to pick both the
highs and the lows, not just once... but every time you spin
the dice. Investing on the other hand, grows because of the work the
real businesses are doing, the real problems being solved, and the real
customers being served.
No Work, No Pay
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