Time In The Market Is More Important Than Timing The Market
"Time in the market is more important than timing the market" is one of those slogans you hear very often in personal finance circles that it almost feels cliché. However, like a lot of these nuggets of wisdom, it holds serious weight when you unpack it, especially when you think of investing with a Barista FIRE mindset like myself, where the goal is financial independence with part-time work to supplement your lifestyle. As such, let us take a look into why focusing on time in the market is so crucial, and why trying to time the market can be a dangerous distraction. 1) The Power of Compounding Over Time Investing is often compared to a marathon, not a sprint (traders may not agree but I belong to the clan of long-term investing). When I invest consistently over time through dollar cost averaging (DCA), I am giving my money the chance to grow, not just linearly, but exponentially, thanks to the power of compounding (for dividend investors like myself, this is where r